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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 becomes member of International Organization for Migration

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Photo credit: Anton Novoderezhlin/TASS

After several negotiations, Russia finally becomes as a full-fledged member of the International Organization for Migration (IOM). It means that Russia has adopted, as a mandatory condition for obtaining membership, the constitution of the organization. It simply implies that by joining this international organization, it has given the country an additional status.

After the collapse of the Soviet, Russia has been interacting with the IOM since 1992 only as an observer. In the past years, Russia has shown interest in expanding this cooperation. The decision to admit Russia to the organization was approved at a Council’s meeting by the majority of votes: 116 states voted for it, and two countries voted against – these are Ukraine and Georgia. That however, the United States and Honduras abstained, according to information obtained from Moscow office of International Migration Organization.

“In line with the resolution of the 111th session of the IOM Council of November 24, 2020 that approved Russia’s application for the IOM membership, Russia becomes a full-fledged member of the organization from the day when this notification is handed over to its director general,” the Russian Foreign Ministry said in a website statement in April.

Adoption of the IOM Constitution is a mandatory condition for obtaining its membership, which opens “extra possibilities for developing constructive cooperation with international community on migration-related matters,” the statement stressed in part.

It is significant to recall that Russian President Vladimir Putin issued an order to secure Russia’s membership in the organization in August 2020 and submitted its Constitution to the Russian State Duma (lower house of parliament) in February 2021.

Headquartered in Geneva, the International Organization for Migration, a leading inter-government organization active in the area of migration, was set up on December 5, 1951. It opened its office in Moscow in 1992.

IOM supports migrants across the world, developing effective responses to the shifting dynamics of migration and, as such, is a key source of advice on migration policy and practice. The organization works in emergency situations, developing the resilience of all people on the move, and particularly those in situations of vulnerability, as well as building capacity within governments to manage all forms and impacts of mobility.

IOM’s stated mission is to promote humane and orderly migration by providing services and advice to governments and migrants. It works to help ensure proper management of migration, to promote international cooperation on migration issues, to assist in the search for practical solutions to migration problems and to provide humanitarian assistance to migrants in need, be they refugees, displaced persons or other uprooted people. It is part of the structured system of the United Nations, and includes over 170 countries.

Senator Vladimir Dzhabarov, first deputy chairman of Russia’s Federation Council (Senate) Committee on International Affairs, noted that the organization’s constitution has a provision saying that it is in a nation’s jurisdiction to decide how many migrants it can receive, therefore the IOM membership imposes no extra commitments on Russia and doesn’t restrict its right to conduct an independent migration policy.

On other hand, Russia’s full-fledged membership in IOM will help it increase its influence on international policy in the sphere of migration and use the country’s potential to promote its interests in this sphere, Senator Dzhabarov explained.

Russia has had an inflow of migrants mainly from the former Soviet republics. The migrants have played exceptional roles both in society and in the economy. The inflow of foreign workers to Russia has be resolved in accordance with real needs of the economy and based on the protection of Russian citizens’ interests in the labor market, according to various expert opinions.

The whole activity of labor migrants has to be conducted in strict compliance with legislation of the Russian Federation and generally recognized international norms.

State Duma Chairman Vyacheslav and Foreign Minister Sergei Lavrov and many state officials have repeatedly explained the necessity of holding of partnership dialogues on finding solutions to emerging problems within the framework of harmonization of legislation in various fields including regional security, migration policy and international cooperation. Besides that, Russia is ready for compliance with international treaties and agreements.

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Relegating the “Russia Problem” to Turkey

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Image credit: Prezident.Az

Turkey’s foreign policy is at a crossroads. Its Eurasianist twist is gaining momentum and looking east is becoming a new norm. Expanding its reach into Central Asia, in the hope of forming an alliance of sorts with the Turkic-speaking countries — Kazakhstan, Uzbekistan, Kyrgyzstan, and Turkmenistan — is beginning to look more realistic. In the north, the north-east, in Ukraine, Georgia, and Azerbaijan, there is an identifiable geopolitical arc where Turkey is increasingly able to puncture Russia’s underbelly.

Take Azerbaijan’s victory in Second Karabakh War. It is rarely noticed that the military triumph has also transformed the country into a springboard for Turkey’s energy, cultural and geopolitical interests in the Caspian Sea region of Central Asia. Just two months after the November ceasefire in Nagorno-Karabakh, Turkey signed a new trade deal with Azerbaijan. Turkey also sees benefits from January’s Azerbaijan-Turkmenistan agreement which aims to jointly develop the Dostluk (Friendship) gas field under the Caspian Sea, and it recently hosted a trilateral meeting with the Azerbaijani and Turkmen foreign ministers. The progress around Dostlug removes a significant roadblock on the implementation of the much-touted Trans-Caspian Pipeline (TCP) which would allow gas to flow through the South Caucasus to Europe. Neither Russia nor Iran welcome this — both oppose Turkey’s ambitions of becoming an energy hub and finding new sources of energy.

Official visits followed. On March 6-9, Turkish Foreign Minister Mevlüt Çavuşoğlu visited Uzbekistan, Turkmenistan, and Kyrgyzstan. Defense cooperation, preferential trade deals, and a free trade agreement were discussed in Tashkent. Turkey also resurrected a regional trade agreement during a March 4 virtual meeting of the so-called Economic Cooperation Organization which was formed in 1985 to facilitate trade between Turkey, Iran, and Pakistan. Though it has been largely moribund, the timing of its re-emergence is important as it is designed to be a piece in the new Turkish jigsaw.

Turkey is slowly trying to build an economic and cultural basis for cooperation based on the Turkish Cooperation and Coordination Agency founded in 1991 and the Turkic Council in 2009. Although Turkey’s economic presence in the region remains overshadowed by China and Russia, there is a potential to exploit. Regional dependence on Russia and China is not always welcome and Central Asian states looking for alternatives to re-balance see Turkey as a good candidate. Furthermore, states such as Kyrgyzstan and Turkmenistan are also cash-strapped, which increases the potential for Turkish involvement.

There is also another dimension to the eastward push. Turkey increasingly views Ukraine, Georgia, and Azerbaijan as parts of an emerging geopolitical area that can help it balance Russia’s growing military presence in the Black Sea and in the South Caucasus. With this in mind, Turkey is stepping up its military cooperation not only with Azerbaijan, but also with Georgia and Ukraine. The recent visit of Ukraine’s President Volodymyr Zelenskyy to Turkey highlighted the defense and economic spheres. This builds upon ongoing work of joint drone production, increasing arms trade, and naval cooperation between the two Black Sea states.

The trilateral Azerbaijan-Georgia-Turkey partnership works in support of Georgia’s push to join NATO. Joint military drills are also taking place involving scenarios of repelling enemy attacks targeting the regional infrastructure.

Even though Turkey and Russia have shown that they are able to cooperate in different theaters, notably in Syria, they nonetheless remain geopolitical competitors with diverging visions. There is an emerging two-pronged strategy Turkey is now pursuing to address what President Recep Tayyip Erdoğan sees as a geopolitical imbalance. Cooperate with Vladimir Putin where possible, but cooperate with regional powers hostile to Russia where necessary.

There is one final theme for Turkey to exploit. The West knows its limits. The Caspian Sea is too far, while an over-close relationship with Ukraine and Georgia seems too risky. This creates a potential for cooperation between Turkey and the collective West. Delegating the “Russia problem” to Turkey could be beneficial, though it cannot change the balance of power overnight and there will be setbacks down the road.

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The Future of the Arctic

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The harsh ecological conditions of the Arctic in the past have sustained economic activity in the region. Climate change, new technologies and innovations open new perspectives for the development of these territories. The Arctic has turned into one of the hotspots of geopolitics: global and regional players are striving to expand their borders. Watching the Arctic is a complex problem, so the solution can only be secured by integrating the forces of all parties in the Arctic.

It is impossible to discuss the development of the Arctic from the standpoint “whether we are going to exploit it or not”, as the industrial development of the Arctic started about 100 years ago. Today 10 million people live around Arctic, only about 10% of them are indigenous peoples. The main question is how we can make this development responsible and sustainable to ensure all three aspects – economic, social and environmental – in the long term and who should be a stakeholder in this activity.

Scientists from Russia, Norway and Iceland, despite the difficulties and deteriorating relations between Russia and the West, are conducting an active dialogue on the future of the Arctic. They call for enhanced cooperation and joint development of the Arctic for the benefit of humanity, not for geopolitical confrontation, because “Together we are stronger.” Scientists have also called for attracting the capabilities of space satellites to conquer the Arctic and solve various tasks and problems. They hope to strengthen public and private investment in human capital, for better education, to attract more talented people, to create high-paying  jobs for young people, to create and develop smart cities. The Arctic is an excellent opportunity for a clean and green economy, for Industry 4.0 and for the creation of new industries.

As part of the High North Dialogue Arctic 2050: Mapping the future, a panel discussion was held on April 23, 2021. The umbrella theme of all Arctic 2050 presentations: Mapping The Future of the Arctic and exhibitors tried to give their views on development and change in the Arctic over the next few decades from the standpoint of economy, trade and maritime transport, energy, ecology and social trends. During the panel Russian scientists from the Skolkovo School of Management, one of the leading research centers in Russia and their Norwegian colleagues discussed possible scenarios for the development of the Arctic in the next 30 years

Although almost all exhibitors were wary of more accurate predictions given the many factors that potentially determine the course of events in this area, the general impression that could be gained from different presentations is that greater importance is expected in this area in world economic and traffic flows. Development opportunities in mining, energy and maritime transport are great, but there are also great unknowns and potential temptations regarding the mutual rivalry of countries in this area, regulating legal and policy frameworks for the implementation of development policies and finally regarding climate change and risk environment.

The ability to think long-term, and to maintain a balance between all three dimensions, is what is called a ‘sustainable mindset’ and this is exactly what the Arctic needs from leaders now and in the future. A new leadership agenda emerges in each and every sector, reflecting the paradigm shift: policymakers will have to work towards creating an enabling environment, incentivizing more responsible investment in the Arctic, instead of trying to find a balance between economic activity and environmental footprint business needs to turn away from the cost reduction imperative and concentrate on creating innovation in technology and business models that together will make it possible to do business in the Arctic sustainably, which means both at the new level of productivity as well as in an environmentally and socially responsible manner. NGOs must concentrate on facilitating multi-stakeholder dialogs aimed at finding a balance of interests, rather than lobbying for limiting policies and challenging business activity in the region.  What is more important, is that, just as with the triple bottom line, these paradigm shifts should be synchronized and synergetic. The sustainable future of the Arctic tarts with the sustainable thinking of the leaders of today.

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