April 2007 Archives

Russia is not afraid to use its weapons of mass distraction

From President Putin's speech to the Federal Assembly last Thursday:

There has been an increasing influx of money from abroad being used to intervene directly in our internal affairs. Looking back at the more distant past, we recall the talk about the civilising role of colonial powers during the colonial era. Today, ‘civilisation’ has been replaced by democratisation, but the aim is the same – to ensure unilateral gains and one’s own advantage, and to pursue one’s own interests.

Some are not above using the dirtiest techniques, attempting to ignite inter-ethnic and inter-religious hatred in our multiethnic and democratic country. In this respect, I ask you to speed up the adoption of amendments to the law introducing stricter liability for extremist actions.

It's good to know that Russia would never violate the sovereignty of another nation or seek to influence events there.

"Our opinion is that the Estonian government must resign. It is obvious that the government provoked the crisis and failed to cope with the unrest in which one person was killed," Kovalyov said at a Moscow airport before departure to Estonia.

...or use its control of state-run media to drum up a hysteria in another country...

Estonian Foreign Minister Urmas Paet accused the Russian media of spreading "lies" and provoking the unrest. He pointed out what he said was misinformation in Russian language reports — including rumors that the memorial was sawed into pieces and that hundreds of ethnic Russians on Estonia's police force had resigned.

"It's a complete lie," he said.
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Paet also criticized Russia for not adequately protecting the Estonian embassy in Moscow.

"Russian authorities have done practically nothing to alleviate the situation and the conditions have only worsened," he was quoted by the Baltic News Service as saying.

"The embassy is attacked with rocks and paint. The access of Estonian citizens to the embassy has also been blocked," he added.

For three days running a large crowd of demonstrators, some wearing Red Army uniforms, has gathered outside the embassy in Moscow.

Despite the harsh words, a group of Russian lawmakers was prepared to visit Tallinn on Monday to assess the situation with the war memorial, a statue known as the Bronze Soldier.

"What is happening with the monument cannot be called anything else but a planned provocation," said Nikolai Kovalyov, head of the veterans' affairs committee at the State Duma, Russia's lower house of parliament, according to the ITAR-Tass news agency.
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Prime Minster Andrus Ansip appealed for calm, and decried the behavior of those who were rioting.

"I'm sure that the hooligans' attacks on everything we hold dear — our children's' safety, our memories, our homeland — will only further unite us," Ansip said in a televised address late Saturday.

Although this book review of Andrei Piontkovsky's "Another Look into Putin's Soul" is about a month old, it still makes for good reading as a follow up to the Federal Assembly speech. The author of the review, esteemed former British Ambassador to Moscow Rodric Braithwaite, needs no introduction.

Review of Andrei's Pionkovsky's Another Look Into Putin's Soul

by the Honorable Rodric Braithwaite

April 1, 2007

Andrei Piontkovsky is not only a penetrating analyst of the Russian scene. He is also a pleasure to read. He writes with a compressed elegance, a penetrating irony that combines wit with a rapier-like brutality. He makes you laugh even as you wonder at the audacity with which he goes after the actors on the Russian political and economic scene. The criticisms of the Russian scene in this book of occasional writings are sometimes exaggerated, even intemperate. But they are always stimulating, always illuminating, and often prescient.

Piontkovsky is a mathematician, a strategic and political analyst, and a member of Yabloko, the nearest thing to a genuine political party the liberal reformers in Russia have been able to put together. He starts this collection of essays as he means to go on. His opening barrage is directed against the President. The first two essays – published immediately after Putin was anointed by Yeltsin at the end of 1999 – are entitled “Stasi – our President” and “Putinism as the highest and culminating stage of bandit capitalism in Russia”. They treat of the return of authoritarianism and the secret police, and of the cynical capture and plundering of the economic process by opportunists among the politicians and bureaucrats as well as the new businessmen and oligarchs. Russia is not corrupt, says Piontkovski. Corruption is what happens in all countries when businessmen offer officials large bribes for favours. Today’s Russia is unique. The businessmen, the politicians, and the bureaucrats are the same people. They have privatised the country’s wealth and taken control of its financial flows: L’état, c’est eux.

Piontkovsky then turns his fire on the war in Chechnya. Here the tone of his voice turns from biting sarcasm to passionate moral denunciation. He has a special scorn for the intellectuals who have found one excuse after another to justify a cruel and unjust war. He has one hero, the ordinary Russian worker in Grozny who chose to stick with his Chechen fellow workers when they were selected for interrogation – and was never seen again: the one just man whose sacrifice could perhaps save the city, the just man God never found in Sodom or Gomorrah.

The later essays deal primarily with Russia’s place in the world. In 2005 Russia faced crises that ranged from fiasco to tragedy, from bungled attempts to manage the “coloured revolution” in Ukraine, to the demonstrations against changes in welfare benefits, to the terrible events in Beslan. Behind these crises, Russia’s leaders claimed, lay the hand of an ever conspiratorial and ever hostile West. Then the West suffered its own fiascos and tragedies – the bloody failure of coalition policy in Iraq, Paris rent by riots, London bombed by terrorists, the American South swept by Hurricane Katrina. Behind proper expressions of concern, the “Energy Superpower” and its prophets among Russia’s nationalistic journalists and intellectuals, exulted. They proclaimed that Russia must be neutral in the growing “clash of civilisations”, but in practice they gave support to the loonies in the Islamic world. The age old Russian curse is still at large: the manic depression, the passionate, incoherent ambiguity in Russian attitudes to the power and values of Europe and the West; the attitudes captured by Blok in his poem “The Scythians”, a poem which Piontkovsky cites repeatedly.

One day, Piontkovsky believes, the chickens will come home to roost. During Putin’s first term, most people – including many Russian liberals but not, even then, Piontkovsky – picked hopefully on Putin’s repeated public statements in favour of democracy, liberal economic reform, the rule of law, and cooperation with the West. In “Phallus or chaos”, Piontkovsky describes what will happen after the presidential election in the spring of 2008. Putin will leave behind a “scorched wilderness”. There will be a renewed division of the spoils among his successor’s cronies; or the engorged “vertical of power” – the authoritarianism which he fostered – will collapse into chaos and nationalism. Elsewhere Piontkovsky sets out a prophetic, or a fantastic, vision of a world once again bipolar, but dominated now by America and China. A comfortable Europe will have been transformed by its increasingly numerous and confident Moslem citizens. And Russia, shorn of its Islamic southern provinces, much of Siberia firmly under the influence of China, will have shrunk back to the marginal status of Muscovy before Peter the Great.

The title of the book “Another Look at Putin’s Soul” is, of course, deliberately provocative, a mischievous reminder of the moment in 2001 when George Bush looked into Putin’s eyes in Ljubljana and was seduced. Now, rightly or wrongly, the West has changed its mind about Putin’s Russia. But Piontkovsky got there first.

From the Great Britain-Russia Association magazine.

Here is a news clip from CNN interviewing Garry Kasparov:

[Below is a translation of an article written by Russian human rights defender Lev Ponomarev as part of our special Zek Week series on Russia's prisons. See the intro post here.]

Analytical Memo on the Situation of Human Rights in the Russian Federation

By Lev Ponomarev

Since 2000, an overall revanche of authoritarian-and police forces is being observed in the Russian Federation, the situation is becoming ever more depressing. As a result of the socio political evolution of recent years, human rights as such are completely absent in our country. This applies to the sphere of politics, and to civil rights, and to the socio-economic area. All that is left is but a certain quantity of democratic liberties, the exercise of which is strictly dosed by the authorities. It is necessary to note that the large-scale restrictions on civil and political rights, first and foremost, serve to neutralize society's resistance to violations of social and economic rights.

The total destruction and emasculation of constitutional-democratic principles and institutions in Russia is accompanied by the spread of unlimited violence and arbitrariness by the security [siloviki], law-enforcement, and law-application structures. Violence and arbitrariness have become everyday occurrences both in whole parts of the country: the North Caucasus (first and foremost - the Chechen Republic, but also the Republic of Daghestan), the Republic of Bashkiria, the Republic of Kalmykia, and within such federal agencies as the MVD and the Federal Service for the execution of punishments (FSIN).

This, not to mention, the disgraceful situation in the armed forces. But if society hears at least something every now and then about the horrors of hazing and even of the summary-justice lynchings in Chechnya and Kabardino-Balkaria, the no less, and often more, tragic situation in FSIN institutions - prisons and camps remains hidden, thanks to the completely closed nature of the agency. It is necessary to note that under its current leadership - colonel-general of the internal service Yuri Kalinin, FSIN has acquired all of the characteristic features of the Soviet GULAG.

Torture (in the broadest sense of this term) have become a customary tool of the law enforcement organs. An investigation to this day is in large part based on "confessions" obtained through torture.

Monstrous arbitrariness and lawlessness is taking place in the system of execution of punishments [the correctional system--Trans.], which, as we have already noted, has been transformed into a new GULAG, where murders of, violence against, and abuse of prisoners have become the norm. Being used for extrajudicial "justice" are the so-called "discipline and order sections", consisting of prisoners collaborating with the administration and receiving, contrary to the law, an opportunity for oppression and violence in relation to other prisoners.

The second Chechen war has been going on during the course of 7 years already. It is gradually spreading out throughout the North Caucasus region. In addition to huge losses of the peaceful population during the course of military actions, according to the data of human rights organizations, as the result of punitive operations and the actions of various "death squads", several thousand peaceful inhabitants of Chechnia, as well as Daghestan, Ingushetia, Kabardino-Balkaria, and North Ossetia, have died or disappeared without a trace. The Russian authorities categorically reject a political peace process, the stakes are placed only on a solution by force and the "Chechenization" of the conflict. This leads to support for the created system of secret lynchings and unrestrained corruption.

A wave of mass lynchings is rolling across the country: at the end of September 2004, participants in a peaceful protest rally in the capital of Kalmykia the city of Elista were cruel beaten; in the middle of December 2005 - mass lynchings took place in the Bashkirian city of Blagoveshchensk and surrounding population centers, where the OMON conducted an action of intimidation entitled "prophylaxis"; on 25 April 2006 in Daghestan, at the village of Miskindji the OMON shot down a peaceful protest demonstration, one person was killed, several wounded.

Using as a pretext by the quashing of an armed uprising in the capital of the Kabardino-Balkarian Republic - the city of Nalchik (13-14 October 2005), the authorities dispensed summary justice to dozens of Islamic dissidents: not one of the participants in the events was taken wounded (all were killed, including, with blows to the head), relatives uncovered traces of torture on the bodies of the slain. The authorities refused to return all of the bodies of the slain (a total of 94) for burial under the pretext of the participation of the slain in a terrorist act.

The inhuman and degrading conditions in FSIN institutions, the existence of a system of dozens of torture chambers "press-zones", the arbitrariness of the red-armbanded "discipline and order sections" constantly provokes massive non-violent protest actions by prisoners, first and foremost in the form of serious self-mutilation. The largest such action took place at the end of June 2005 in a "press-colony" in the small town of Lgov of Kursk Oblast. Several hundred prisoners (according to various data - from 500 to 700) mutilated themselves then.

The fact that the fault for what took place lies on the administration of the colony was stated both by then-miniser of justice Yuri Chaika and human rights Ombudsman in the Russian Federation Vladimir Lukin. However, the guilty parties from the side of the administration remained unpunished.

The army has in fact once again become a "serf army" - powerlessness reigns in it, soldiers are used as free labor, several thousand soldiers, predominantly young, die or are crippled for life every year.

A characteristic feature of ensuring that both regions and agencies remain "closed" is the tried-and-true system of collusion between the court, the procuracy, and the administrative power, which makes actions in defence of the rights of citizens practically hopeless. Such "consensus" creates unique conditions for conducting repressions, be they "contract" prosecutions or mass actions along political or ethnic lines.

Speaking of the destruction of the principles of a law-based democratic state and an independent civil society, it is necessary to note the role of the well-oiled propaganda machine. Not limiting itself to the establishment of censorship, the power has transformed the mass media into a weapon of state propaganda, based on populism, a cult of autocracy, paranoia and xenophobia.

Under the pretext of a struggle with xenophobia, the authorities have significantly expanded the concept of extremism, sweeping many kinds of opposition agitation into this category. Meanwhile, the procuracy is sabotaging the struggle with true neo-nazi organizations and anti-semitic campaigns.

In many cases, we can already speak of actual encouragement by certain governmental and law-enforcement structures of the neo-nazi and neo-fascist "opposition".

The latest example of the inflaming by the authorities of xenophobia became the monstrous anti-Georgian campaign unleashed at the end of September 2006. At the same time, already at the very beginning of the campaign, Procurator-General of Russia Yuri Chaika publicly declared in advance that "all measures being applied comply with the law".

The mass media, controlled by the state, immediately created an "image of an enemy", of violators of the law, of the prime culprits in various crimes, out of Georgians found in Russia. Mass deportations began - tens and hundreds of people, without distinction as to whether or not
the deportees have a visa or a residence permit. Because of the horrible conditions under which the deportees were held, Tengiz Togonidze died right at the airport.

For identifying ethnic Georgians, the police in several regions attempted to compet educational establishments to report lists of schoolchildren of Georgian origin. But only the Department of Education of Moscow recognized this as unlawful.

This anti-Georgian campaign has already be recognized both in Russia and in by the international public as a manifestation of ethnic discrimination.

With each passing day, new difficulties are being created for the functioning of civic associations, they are deprived of many rights, including, the right to appeal in favor of citizens to organs of state power and courts.

Political persecutions have become the norm. There are already dozens of political prisoners in Russia.

It is natural, that the authorities who are conducting a frontal attack on rights and liberties are preparing for the quashing of protests. A great deal has already been done for the conducting of both "pinpoint" and mass repressions. Including an ideological justification for the repressions, and "elastic" anti-extremist legislation. As a result of the court-and-judicial "reform" and the efforts of the Procuracy-General, the system of guaranteed issuance of guilty verdicts, adoption of court decisions in favor of the power, and pressuring of defense lawyers - which has acquired the contemptuous name of "Basmanny justice" - has been honed to perfection. This was manifested in all its glory during the time of the anti-Georgian campaign.

Pointing to the readiness of the authorities for new kinds of mass persecutions of the opposition is the large-scale, cynically anti-constitutional operation by the FSB abd MVD - with the use of provocations, threats, beatings, and contract convictions in relation to several hundred participants in the Second Russian Social Forum (RSF-2) in many regions of our country.

In Russia there have been adopted, but unlawfully classified, normative acts sanctioning "collective punishment" of entire population centers, extrajudicial lynchings (up to and including summary executions) and internment in improvized centers of inquest, the so-called "filtration points". One of the examples is Order No. 870-DSP of the Ministry of Internal Affairs of Russia of 10 September 2002 (signed by Boris Gryzlov) and Attachment No. 1 (on the actions of the MVD in extraordinary circumstances) to this order.

There are serious grounds that what took place on the eve and during the Social Forum became the result of a massed operation of the special services on the basis of secret FSB and MVD directives. Testifying to this is the "Excerpt from the Plan for joint measures of the GUVD of
Saint Petersburg and Leningrad Oblast and the UFSB of Saint Petersburg and Leningrad Oblast to provide for the security of the preparation and conducting of 'Group of Eight' events in the city of St. Petersburg in the year 2006 and the realization of the demands of Directives of the MVD and FSB of Russia of 19.10. 2005 No. 941 and of 29.10.2005 No. 968.861". The excerpt is prepared by Senior Inspector of the KRP for PT of the Operational Headquarters of the GUVD, lieutenant-colonel of the police E.E. Trofimovich.

This plan in fact gave directions to pursue and block the arrival at the Forum of representatives of "informal" (unregistered) youth groups and anti-globalists (Forum participants preferred to consider themselves "alter-globalists") on a par with "band[it]formations" and religious radicals (this is a euphemism applied to independent currents in Islam).

If we are to sum up, then practically all constitutional guarantees of human rights and personal liberties have been liquidated, legal, ideological, and political conditions for the conducting of repressions - both against political opponents and against entire categories of the population - have been created in Putin's Russia.

Furthermore, during the course of several months of the year 2006, various variants of mass persecutions were tried out: in June-July in relation to the participants in RSF-2, starting with October - in relation to ethnic minorities set in contrast by president Putin to the "native" population.

Repressions are becoming a universal practice, the number of political prisoners has attained the level of the 1970s-1980s.

The anti-Georgian campaign, the readiness of the law-enforcement organs for ethnic persecutions, has displayed a tendency towards the fascization of power, the appearance of a new quality in the authoritarianism that has been created.

As has already been noted, the liquidation of democracy and violations of access to justice have created conditions for a broad offensive on social and economic rights. A brazen violation of the rights of small and medium-sized business is going on, the "middle class" that arose as the result of liberal reforms is ever more defenseless in the face of the arbitrariness of the power and the monopolies.

Rights providing for the vital needs of broad categories of the population are being violated in the grossest manner. Over a third of the population of Russia is found in conditions of frightening poverty, is deprived of access to necessary medical assistance. Another third is in very great need. The housing-and-public-utilities sphere is extremely monopolized and corrupt. The artificial understatement of purchasing power and the system of state monopolism impedes the development of domestic industrial and agricultural production, dooms the overwhelming majority to powerlessness and huge deprivations.

In honor of Mikhail Khodorkovsky and the rest of Russia's new generation of political prisoners, this week my blog will be dedicated to special coverage, stories, translations, and reports on the conditions inside Russia's prision system. "Zek" is an old Soviet slang term for an incarcerated person (заκлючённый) in the Gulag system - hence we are calling this series "Zek Week."

In my long experience with Russia, one of the great contrasts I have noted with the West is the strong societal role that the prison system plays. It is difficult for a Western mind to grasp the political centrality of the penitentiary system, which is not only known as the dreaded holding cells of real criminal offenders, but also the home away from home for political dissidents, inconvenient rabblerousers, and often the mentally ill or simple minor delinquent. The historical trend of Russia imprisoning large numbers of its citizens not only served a function of political repression, but also provided the state with free labor.

Under President Vladimir Putin's "dictatorship of the law" regime, incarceration rates continue to be high, while at the same time the woefully underfunded peniteniary system crumbles to pieces (the zeks often have to rely on family members to bring them meals and clothes). According to official statistics, 829,000 inmates are currently serving out terms, which is second only to the United States.

Alternative sentencing like community service or probation is extremely rare, and the minimum sentencing terms are extremely high. Russia's prisons have become a breeding ground for disease (a recent study cites a prevalence of tuberculosis), and the BBC even reported last year on an outbreak of self-mutilation among prisoners in Lgov:

One day last June at the Lgov prison south of Moscow, more than 300 inmates slashed their bodies with razor blades.

Many prisoners cut at their wrists, necks, or stomachs.

This was organised self mutilation in protest against alleged abuse by prison officials; its sheer scale shocked many Russians, who are used to hearing appalling tales of life inside Russia's dilapidated and overcrowded prison system.
...
But Lev Ponomarev, from the Movement For Human Rights, believes the regime itself is the real issue now, a system he says which can lead to a culture of cruelty.

"Prisons in Russia are better funded and some are refurbished but these improvements can't work whilst a humiliating regime is in place.

"The prison authorities are harassing, beating even killing people sometimes. The act of protest by the prisoners in Lgov, who cut themselves in their hundreds, was a manifestation of the despair," he said.

The prison director and two of his deputies were sacked after an investigation later supporter the inmates' claims of mistreatment, a rare outcome for a prison protest here in Russia.

We have been in contact with our good colleague Lev Ponomarev, the lion of Russian human rights defenders who is quoted in the above BBC article, and he has agreed to have us publish a number of his translated articles for Zek Week. Following this post I will put up the first article from Ponomarev in this series - please stay tuned for more as the week progresses.

An editorial in today's Wall Street Journal urges U.S. policymakers not to allow Russia to use empty threats to gain leverage. Given that the Conventional Forces in Europe treaty is thoroughly outdated, and that Russia's withdraw seems to have no practical effect, it seems that Moscow is more determined to create fractures within NATO than protect its own security.

Much of the rest of the speech, however, was an eerily familiar tirade against the West that could have been lifted from a Cold War script. Once again, foreign capitalists are staging a counterrevolution in Russia or, in the President's words, "there is a growth in the flow of money from abroad for direct interference in our internal affairs." Once more, a Kremlin ruler warns of rising threats of "mutual damage and even destruction."

Specifically, Mr. Putin threatened to suspend Russia's participation in the Conventional Forces in Europe treaty, the 1990 pact that limits the number of battle tanks, heavy artillery, combat aircraft and attack helicopters between the Atlantic and Ural mountains. Talk about nostalgia. The treaty's limits apply to NATO and the Warsaw Pact. Since the Warsaw Pact is dead, and many of its former members now belong to NATO, the CFE long ago lost its relevance. The quality of Russia's ground forces has steadily eroded since the CFE was implemented in 1992, making a Putin "moratorium" even more irrelevant.
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Against all evidence to the contrary, Mr. Putin continues to insist that the proposed missile-defense system is directed against his own country. He knows that's not true, but it's a line that plays well in parts of Europe, especially France and Germany. His comparison to the deployment of U.S. Pershing missiles in Europe in the 1980s, which led to huge anti-American demonstrations, is designed to tap into those Cold War-era emotions.

As for the CFE, Mr. Putin may be on to something there. The treaty -- in both its original and adapted forms -- has outlived its usefulness and deserves to go the way of the Soviet Union. The West would do far more damage to its security if it allowed Moscow to use empty threats about pulling out of an irrelevant treaty to divide the NATO allies and pressure them into concessions on really vital issues, such as the missile-defense system.

There's nothing sinister about Sonatrach's alliance with Gazprom, says Algeria's energy minister

Algerian energy minister Chakib Khelil has played down the significance of Gazprom’s alliance with Sonatrach, insisting it has nothing to do with exerting greater control over gas markets.

“All it says is both companies will work together to establish joint projects,” said Khelil at a press conference in Barcelona on Friday. “There is no agreement to corner markets.”

Khelil: There's nothing special about the agreement

Last August, Gazprom and Sonatrach signed a memorandum of understanding (MOU) “for deeper co-operation between the companies”. Areas covered by the MOU include exploration; production; transportation; gas transmission and distribution; and oil processing and marketing.

So far, nothing concrete has emerged from the agreement, but the announcement gave rise to feverish speculation that Russia and Algeria were plotting to use their combined market power – together they account for over a third of the European Union’s gas imports and their market share is rising – to increase gas prices.

Khelil, however, insists that is not the case. He also said any attempt to control European and global gas markets would be unsuccessful. A cartel of gas producers, along the lines of Opec, would not work, he has argued in the past, because of the lack of liquidity in the market, with most volumes tied up in fixed long-term contracts.

In addition, he said, attempts to control the European market would fail because much of it is already monopolised by Europe’s state-owned companies, such as Gaz de France, through which Sonatrach must sell in order to gain market access. Indeed, Khelil called on European governments to allow Sonatrach to sell gas directly to consumers; this, he said, would be to the benefit of consumers because it would lower prices by cutting out the middle man.

It may be that the much talked about MOU between Gazprom and Sonatrach proves to be insignificant. Grand-sounding agreements are often signed between energy companies or states and often yield very little in the way of practical action.

It was thought that Sonatrach’s expertise in gas liquefaction, and LNG shipping and marketing were the areas that would be of greatest use to Gazprom. However, Sonatrach is not one of the four companies shortlisted for participation in the Baltic LNG project, which will have a capacity of between 5 million and 7.2 million tones a year and is to be built near the Primorsk oil terminal. A decision on which two foreign companies will participate is likely to be taken in the autumn.

Nicholas Eberstadt, an AEI scholar, makes a very reasonable call upon Europe and the United States to help Russia with an international campaign to improve health care, prevention and public safety measures, and help decrease the country's extraordinarily high premature death rate in an article in the new Foreign Policy.

Save the Russians!

By Nicholas Eberstadt

Citizens of the former superpower are dying in catastrophic numbers. For very little, we could prove they haven't been forgotten.

In the seven years since Vladimir Putin came to power, Russia has sustained an utterly catastrophic toll of "excess mortality" among its population at large. Indeed, since 2000, approximately 3.9 million more Russians have died prematurely--1 million women and nearly 3 million men--than would have if the hardly exemplary health conditions of the Gorbachev era still prevailed today. This toll amounts to more than twice the total wartime losses that the Russian Empire suffered under Nicholas II in World War I. Even more astonishing, on a per capita basis, the toll from "premature" mortality in Russia may now match--or exceed--sub-Saharan Africa's death toll from HIV/AIDS. It's grim proof that it is indeed possible for an urbanized, literate society to suffer long-term health declines during peacetime.

To its everlasting dishonor, Putin's Kremlin has chosen to ignore the awful and continuing hemorrhaging of Russian life from this gaping national wound. But that doesn't mean the rest of us should do the same.

Rallying to save millions of Russians over the coming decades would not be mere hyperbole: We know that relatively inexpensive policy interventions there could save hundreds of thousands of lives each year. Russia's current death spiral circles principally around unnecessary and preventable mortality from heart disease and severe trauma (both closely related in Russia to severe excess drinking). Why not respond in force with, for example, preventive cardiovascular programs, alcohol education, road safety campaigns, and the establishment of emergency medical units in Russia's urban centers?

A recent study by Johns Hopkins University indicates that intelligently crafted medical initiatives could be remarkably cost-effective in Russia: Traffic-safety measures could save lives for as little as $5 per year of life saved; cardio therapies involving aspirin and beta blockers can do the same for around $25; and the price of each death averted through urban emergency medical units with ambulances works out to less than $1,500. Such evidence suggests we could make major inroads against the current health disaster for perhaps as little as a few hundred million dollars a year.

As consequential as the purely humanitarian impact of an international campaign to save the Russians could be, important political dividends also stand to be reaped. At a time of increasing Russian isolation, such a campaign would be an important symbolic gesture to the Russian people that they have not been forgotten. Nor should we forget that the fates of demography and democracy may be more closely entwined than many appreciate. Modern history demonstrates a powerful connection between the nature of governance and the health of the governed. Limited constitutional democracies, given their principled respect for the lives of their citizens, are obliged to protect and care for the people in an entirely different manner than autocracies and dictatorships, where such efforts are always opportunistic and conditional. Treating human lives as though they matter--and catalyzing more political voice for that same sentiment within Russia--may be a first step in reviving that country's democratic project.

The Sunday Herald has published a long feature article which weighs the legacy of the Putin era.

The charge sheet against Putin is, however, a long one. Since he assumed the Russian presidency on the last day of the last century, at least 20 journalists have died in suspicious circumstances.

Shot, stabbed or poisoned, they have two things in common: no-one was convicted, or in most cases even arrested, after their deaths, and all of them had angered powerful vested interests.

In 2004 American journalist Paul Klebnikov died in a hail of bullets on a Moscow street while in October of last year investigative reporter Anna Politkovskaya was gunned down in the lift of her apartment block. Nobody has been brought to justice for either murder.

That media freedom has been steadily eroded in the past seven and a half years is beyond question. All nationwide TV channels are under state control and the nightly news has come to resemble the Soviet newscasts of old.

Changing channels doesn't help: the news is the same on all of them. Putin giving instructions to his ministers, Putin visiting a factory, Putin shaking a foreign leader's hand or Putin on holiday, and so it goes on.

Newspapers, though a bit freer, have also come under increasing Kremlin control. In the last few years many of the country's most influential titles - Izvestia, Kommersant and Nezavisimaya Gazeta - have been taken over by Kremlin-friendly oligarchs.

Political freedoms have been gradually curtailed, often under the pretext of clamping down on "extremism" or fighting terrorism.

Whereas in the past regional governors (who form a vital part of the system of governance in such a vast country) were elected, they are now appointed by local parliaments who almost always do what the Kremlin tells them to do.

Kremlin opponents also face serious obstacles when it comes to staging protests. In the last month two opposition rallies, in Moscow and St Petersburg, have been brutally disrupted by baton-wielding riot police who claimed they were provoked by "extremists".

Not that the opposition enjoys widespread support; those rallies only attracted around 2000 people apiece, hardly a groundswell of popular discontent in a country of 144 million people.

The Kremlin seems unready, however, to even tolerate poorly attended public displays of opposition.

Equally, anyone who gets too big for their boots and looks like they might be a political threat is neutralised, often by being ridiculed in the press.

In the case of Mikhail Khodorkovsky, once Russia's richest man and the head of the Yukos oil firm, the penalty was a good deal stiffer, of course.

His political ambitions saw him sentenced to eight years in jail for various white-collar crimes; he is now serving time in a remote Siberian prison camp.

Foreign and domestic human rights organisations have also had a rough ride. A new law gives the Kremlin unprecedented oversight of their activities and the power to shut them down at will.

Under Putin, racist violence has exploded. Last year 53 people were killed and 460 injured in racially motivated attacks, according to the human rights centre Sova.

At times Putin's desire to make Russians feel good about themselves has appeared to promote an alarming "Russia for the Russians" mentality.

New laws that took effect earlier this month banned non-Russians from working in the country's food and clothes markets, for example.

Critics also contend that high oil and gas prices have given Russia a weapon with which to bully disloyal neighbours.

Both Georgia and Ukraine have been left in the cold temporarily by an indignant Moscow in recent years.

And then there is Chechnya. It was Putin who prosecuted the second Chechen war in 1999 as prime minister, a hardline policy he continued when elevated to the presidency.

That war is all but over but tens of thousands have died or simply disappeared in the intervening years.

But what are negative points seen through a Westerner's eyes are often plus points when filtered through a Russian prism or at the very least a price worth paying for stability and prosperity.

In truth most ordinary Russians are more interested in their next foreign holiday, buying a new car, or securing a mortgage, than human rights abuses or Chechnya.

Nor do many have much of a yearning for democracy; the concept was discredited in the 1990s when living standards plunged.

The question now then is, will the man who has presided over a feel-good economic boom really stand down next year as promised.

Uncertainty has crept in after some of Putin's supporters called for the constitution to be changed to allow him to stay on; he insists he is really going.

Either way, his legacy is assured. The two men in the running to succeed him are from his inner circle and would be certain to keep Russia on the course that he has set it.

Most Russians believe that even if he does keep his word and step down he will not be far from the centre of power anyway, a sentiment he appeared to encourage in his final state-of-the-nation speech.

"It would be premature," he said, "to deliver my last political will and testament."

La Russophobe has provided another valuable translation of an article by Andrei Illarionov. The translation of this series can be viewed here.

The Authoritarian Model of Governance: Preliminary Results

Andrei Illiarionov

April 2, 2007

Kommersant

(A. Illarionov is the President of the Moscow Institute for Economic Analysis, Senior Fellow of the Cato Institute, Washington D.C.. In 1993-94, he headed the Group for Analysis & Planning in Viktor Chernomyrdin’s government and from 2000 to 2005 was economic advisor to Vladimir Putin)

The new structure model for Russia has been created. It is a brute force model, the main aspect of which is the use of force unfettered by any restraints – legal, traditional, or moral. That is the essence of brute force politics [силовая политика]. Thus we have brute force enterprise, brute force jurisprudence, brute force foreign policy. And the first fruits of this may now be examined.

Collapse of the institutions of the modern state.

In terms of the quality of the most important institutions of the modern state, today’s Russia is at the bottom of any list. With regards to political rights and civic freedoms, our country stand in 158t place out of 187 countries of the world – between Pakistan, Swaziland, and Togo. With regards to freedom of the press, Russia is 147th out of 179, ranking alongside Iraq, Venezuela, and Chad. In corruption, Russia occupies 123rd place out of 158, next to Gambia, Afghanistan, and Rwanda. In protection of private property rights – 89th out of 110, on the same level as Mozambique, Nigeria and Guatemala. Quality of legal system: 170th out of 199 alongside Burundi, Ethiopia, Swaziland and Pakistan. Effectiveness of civil service: 170th out out of 203, giving us Niger, Saudi Arabia, Cameroon, and Pakistan as neighbours.

The brute force state model legalises violence in our society. The number of murders per thousand inhabitants in Russia is the world’s 7th highest among 112 countries, lying between Ecuador and Guatemala, a little better that South Africa and a touch worse than Mexico. In overall physical security Russia’s inhabitants occupy 175th place out of 185 countries, ranking in the same group as Zimbabwe, Sudan, Haiti, and Nepal. The siloviki have no care for their fellow-countrymen’s safety.

And what, one may ask, about the financial, technological, and operational abilities of the “force” sectors of the state – the armed forces, the police, and the special services? Hasn't the fact that they have undergone reinforcement in recent years strengthened the state?

Unlike the institutions of any modern state which exist to ensure the safety of its citizens; to guarantee their equality before the law and the powers that be; to maintain the supremacy of the law and checks and balances; to provide freedom of the press; to protect private property, freedom of speech and of public and political organisation and the right to participate in the political life and running of one’s country, the “force” sectors differ because they are elements of the traditional state apparatus. Reinforcing them does not necessarily lead to a strengthening of the institutions of a modern state. The fact that the “force” sectors are flourishing is evidence of change in the opposite direction, of the degradation of the institutions of a modern state such as we see, for example in Somalia and Afghanistan, Iraq, Sudan, Cuba and North Korea.

Where are we heading? Is it that the low rankings on Russia’s state institutions are the result of the oligarchic past, of the “collapse” and “chaos” period in the 1990s and that these things are now being overcome by the stubborn work of brute force civil servants?

Complete myth. The sharp fall in the quality indices of state institutions has occurred in recent years. In 1998 (the last year before the advent to power of the siloviki), the level of civic freedom in Russia was 58% of the mean figure for the OECD countries. In 2002 (on the eve of the arrest of P. Lebedev and M. Khodorkovsky and just before the destruction of Yukos), this had dropped to 47% and by 2006 to 37%. The press freedom index in that time dropped from 55% to 47% and 33% while the political rights index fell accordingly from 57% to 45% and 27%.

The freedom from corruption index which back in 2002 was only 35% of the mean for the OECD countries dropped to under 30% by 2006. Safety of property rights, which had reached 54% of the mean level for developed countries by 2002, dropped to a mere 14% by the end of 2006. The World Bank gives the following figures for the fall of Russia indices (based on OECD levels for the period 1998 to 2005: government accountability – down from 60% to 43%; political stability – down from 51% to 43%; quality of civil service management – down from 59% to 56%.

The number of murders per 1000 inhabitants in Russia was 12 times the OECD level in 1998; by 2004 – 14 times. The number of serious crimes against the person more than doubled between 1998 and 2006. In 2006, in “conditions of political stability”, with record prices for oil and gas, unprecedented economic growth, a fantastic rise in wealth, and with absolute power in the hands of the siloviki, the level of crime in the country is more than twice what it was in 1998. And 1998, let’s not forget, was the year of the greatest crash of the economy at a time of low oil prices but greater democracy.

This is total failure. The deterioration in the field of foreign affairs is no less marked. Having successful quarrelled with nearly all our foreign partners, the brute force state has created a situation not seen for a long time in Russia’s history: it would seem that today we have no allies at all. The army and the navy remain, but not a single ally for our foreign policies remains. Trumpet as we may of diplomatic successes, Russia is to all intents and purposes isolated in its foreign policies. This became particularly clear after the murder of Anna Politkovskaya and the poisoning of Alexander Litvinenko. A comparison with the previous seven years shows that the average level of meetings between Russian officials and their foreign peers halved during the winter of 2006-2007. The number of meetings with heads of Western states was down to a third of the previous level and with heads of CIS states down 3.4 times. As a well-known television personality said: that is failure.

True, the reduction in the number of contacts with traditional partners in Europe, North America, and the CIS has been partially counterbalanced by a 50% increase in contacts with Eastern leaders – Indonesia, Mongolia, Lebanon, Syria, India, Guyana. Qatar, Saudi Arabia, and China. The evolution of Russia’s internal political institutions is complemented by an evolution of the country’s foreign policy preferences.

What about the economic boom?

Isn’t the growth at least impressive? Growth there has been, but it should be judged in context. Mean GDP growth for 2004-2006 amounted to 6.8%, higher in actual fact than that of some European countries. But it is lower than the 8.2% growth achieved by Russia in 1999-2000 at the start of the oligarchies and before the brute force model got under way. At the same time oil – at $52 per barrel – has tripled in price since 1999-2000 ($19 p.b.), a gift to the country’s foreign trade figures worth 15-18% of GDP which was totally absent in 1999-2000.

The real example of economic growth in the last 30 years is not anaemic Europe but dynamic China. Russia lagged behind China back over the last decades and continues to lag behind today. While Russia GDP grew by 58% between 2000 and 2006, China’s rose by 88%. Seven years ago, China’s economy was 5 times the size of Russia’s, today it is 6 times.

Thanks to the brute force model, the country has been turned into an economic invalid even when viewed against the background of the other countries of the former USSR. Only two countries of the 14 former republics had growth rates higher than Russia’s in 1999-2000. For 2004-2006, 12 of them did better than Russia. With the brute force model ruling, Russia is being overtaken not only by other oil-and-gas exporting countries such as Kazakhstan (GDP growth of 94% over seven years) and Azerbaidzhan (153%). Russia is now also being overtaken by oil-and-gas-importing countries such as Armenia, Tadzhikistan, Latvia, Estonia and Lithuania.

Even Georgia, which has no energy resources of its own and is furthermore subject to a total trade, transport, energy, travel and postal blockade by Russia, saw a GDP growth of 9% last year whereas Russia, swimming in petrodollars, achieved only 6.7%. One could not ask for a clearer demonstration of the total failure of the brute force model!

Catastrophe

All crises have serious consequences. When economic policies fail even a serious cataclysm (like, for example, the 1998 crisis in Russia) can be overcome by responding with a responsible policy line. However, if institutions of state are destroyed, the force of their own inertia can lead to catastrophe, the depth, duration and consequences of which are of a quite different scale to political crises.

The institutions of a modern state are the most important factor for economic growth and for giving the country its standing and its citizens a place in the modern world. The brute force government model has been tried dozens of times and we have been convincingly shown to what it leads. Vide: North and South Korea, East and West Germany before the 1990s, China and Taiwan before the 19809s, North and South Vietnam before 1975.

The countdown for the new historical experiment is already under way. It has not taken long for it to become clear how badly the brute force model of government in Russia does in comparison with the freer models in the Ukraine and Georgia. If the experiment is continued, we will have the opportunity to see how Russia is sidelined by all our freer close neighbours.

In foreseeing crisis, out of habit we narrow our focus to energy resources: what if the price of oil falls? Versions of this can be heard all over the place. But the problems does not lie in tomorrow but in today. It’s not a matter of the price of oil but rather of today’s government institutions, not external factors but internal ones. The problem comes from the brute force, raptorial and hierarchical state model imposed on Russia today.

Its creators promised a rebirth of the Russian state but the brute force model is killing it. Its creators promised security to the country’s citizens but the brute force model is delivering the opposite. Its creators promised to strengthen Russia’s sovereignty but the brute force model is leading to her isolation. Its creators promised faster economic growth but the brute force model guarantees it will lag behind. Its creators promised a stronger country but the brute force model is making it weaker.

There is nothing more important for today’s Russia than a change of government system.

In a Week in Review column in today's New York Times, Steven Lee Myers gives some analysis to the Kremlin's decision to pull out all the stops and provide Boris Yeltsin with a lavish State funeral, and lionize him as the founder of Russian democracy - despite the near policy reversal that has occurred under the current administration.

From the Times:

After hesitating in the hours after his death on Monday, as if unsure how exactly to respond, the Kremlin employed the full power of the state’s servile television networks to transform Mr. Yeltsin’s beleaguered image into the religious, patriotic father of the political system he bequeathed to the current president, Vladimir V. Putin.

In three short days, the authorities here burnished a new founding myth, one that, not incidentally, proved useful for Mr. Putin’s own legacy. In this new-minted myth, the bold, firm hand of patriots is what preserves democracy, not the messy, uncertain expression of popular will.

The elevation of Mr. Yeltsin overlooked the darker side — the defeat in Chechnya, the rise of the oligarchs, the capitulation to the West, the drunkenness — partly out of respect for the dead, no doubt, but also because it let Mr. Putin portray himself, too, as a defender of the revolution and restorer of Russian greatness. Mr. Yeltsin became, in this incarnation, what Nina L. Khrushcheva, the great-granddaughter of the Soviet leader Nikita S. Khrushchev, called the “czar of Russian democracy.”

“It’s an oxymoron,” she said in a telephone interview from New York, where she teaches international affairs at the New School, “but in a sense, that’s what Putin has made him into.”
...
Mr. Yeltsin was a historic figure, bridging the totalitarian past and the hopes for a democratic future, one that Mr. Putin’s critics now say is under assault. His funeral represented a break from the past and, simultaneously, an embrace of it. It served as evidence of a country still searching for the symbols that gird its national idea or identity or, perhaps better to say, a country still arguing over them.

On the day of the funeral, the lower house of Parliament reversed its earlier vote to remove the Communist hammer and sickle from the Victory Banner, the military flag commemorating the victory over Nazi Germany. Mr. Putin had vetoed the initial legislation.

Mr. Putin eulogized his predecessor in a way he rarely did when he was alive, describing him as the steadfast democrat and reformer of “great Russia,” not the weakened, chaotic Russia that emerged from the Soviet ruins. It is surely the legacy Mr. Putin would like to embrace as his own.

Mr. Yeltsin’s greatest achievement, arguably, was voluntarily surrendering power for the first time in the country’s history. The day after the funeral, Mr. Putin addressed Parliament and insisted, despite calls to do otherwise, that he would also step aside, when he finishes his second term next year.

Ms. Khrushcheva said Mr. Putin embraced Mr. Yeltsin the way Stalin embraced Lenin, appropriating his legacy by transforming him “into the realm of state propaganda” to be used for other ends.

Even so, for many here, Mr. Yeltsin’s death served as a reminder of what changes have occurred. More than 20,000 people waited in line for hours for a last glimpse of the man. “Nobody brought them in buses, like before,” Mr. Shevchenko said, referring to the grandiose funerals of Soviet leaders. “They came themselves to say goodbye to the first president of Russia.”

The recent saber rattling by the Kremlin is the beginning of the succession rhapsody. As stated in earlier postings, VVP has determined that color revolutions are best avoided by the definition of a common enemy. One day it is the Georgians, the next day the Americans, the next day the Estonians, and so on and so on. This will be a year when the Russian populace will be dragged from one ultra-patriotic xenophobic frenzy to another, as Mr. Putin, the grand director of sovereign democracy and political technology, inoculates himself from public debate (which he is a great position to win), and sets up his successor for lower temperatures and reduced tensions once the annus horribilis of 2007-2008 is just history.

However the Georgians, the Americans, and the Estonians are not amused by the stabilization service they have been made to provide the Russian president, and these kinds of constructive confrontations are going to become increasingly more costly to conduct.

The French Elections

By the Polittechnologist

A couple of days ago Bob Amsterdam called and asked why I haven’t written anything in a long time. I told him it was because there was nothing going on. And this is true – what’s going on right now in the Khodorkovsky case, and in Russia in general, can easily be described with this one empty word – “nothing”.

Of course events are occurring, and impressive ones at that. But they could just as well be entirely different events, with exactly the same effect. There’s no difference. All of the roles and all of the parts in this play have been written out long ago, after all, and the populace of the country is merely playing its role as extras in this script. Last weekend it was called “The March of Those Who Disagree”. A few days later it was “Yeltsin’s Funeral”. The actors are more or less the same each time, only they play different roles. In “The March of Those Who Disagree”, the OMON dispersed the march and arrested its participants. In “Yeltsin’s Funeral”, the OMON guarded a long queue of mourners outside an Orthodox cathedral, a queue consisting of practically the same “those who disagree”.

Besides that, nothing has changed. Rosneft is buying up the mortal remains of YUKOS. Khodorkovsky is being fitted for a new criminal case and can probably expect yet another one after that. Those who are in power are busy divvying up the spoils and the money they haven’t yet managed to steal but are already counting. And everything is going along its appointed path. Things weren’t so peaceful even under Brezhnev.

Everything is as peaceful and quiet as at a cemetery. Quiet and unchanging. Only here we have living people, and they could wake up. For example, if oil prices drop. And then they will question the cost of this stability. But this isn’t happening yet, and we’re ready to take a look at another theatrical performance, for example the one starring the journalist Tregubova. She is, of course, against Putin, but she’s already in London. As an FSB general of my acquaintance says, “And what does this give us, besides emotions?” Nothing. Just another play. I hope Messrs. Kovtun and Lugovoy won’t dare poison a woman with polonium or who knows what else.

I’ve pored over all the recent events time and again but I just can’t find anything – nothing at all – of significance. Except the French elections. It surprised me to realize that I’m actually interested in who will win – Sarkozy or Royal. I even found myself genuinely cheering on one of the candidates (I won’t say who…).

I remember cheering like that during the World Cup last year – first for the Ukrainians, and then for the Italians after the former had been eliminated. I cheered for them because we didn’t have our own football in Russia. And now I’m cheering for the possible future president of France. Because we don’t have our own elections in Russia either. Just like we don’t have our own quality automobiles, our own quality airplanes, or our own normal law-enforcement organs. In short, we don’t have anything of our own any more.

Only a president. The one who’s still alive. And may God grant him health. Because despite all my desire to remain a democrat, I am in favor of Putin going for a third term. Because that will be something. Improper, evil, and dangerous. But it will be something of our own, something about which it can be said that it has broken this vicious circle where nothing happens.

Everyone who stands behind Putin is a nobody. These are frightening faceless people. They belong in a museum. Even if this museum’s name is “The Kremlin”. But Putin – he’s real. His third term will be exactly what we deserve. And we should do nothing to interfere. Let him continue. Because there is nobody else besides him in Russian politics. Well, not exactly. There is one person. In a prison in Chita. But I’m afraid Russia isn’t ready for him yet. So go ahead, vote for Putin. And don’t interfere with him.

I just read on David McDuff's blog that Russian reporter Yelena Tregubova has applied for asylum in the United Kingdom. A while back Grigory Pasko wrote about how Tregubova had been in hiding for her own safety.

[This obituary was written by an anonymous contributor to the blog, who as a young musician had the distinct honor of personally meeting the great Russian master.]

In his prime, Mstislav Rostropovich, the greatest cellist of his time, played like a man possessed by demons. Anyone who had the privilege of watching him play in the 1960s and early 1970s found it almost painful to watch as Rostropovich engaged in what seemed a fierce and personal struggle of life-or-death intensity with his instrument, desperately fighting to make it produce sounds of incredible and sublime beauty.

When he lived in the USSR, Rostropovich played like a man possessed

It was only later that we learned just what a nightmarish inner hell this amazing man was living through each and every day of his life in the Soviet Union. A man of profound moral convictions, he was literally being rent asunder from within by the inhumanity, lies, hypocrisy, and falsehood he saw around him every day. At last he could take it no more, and spoke out – for artistic freedom, for freedom of speech, and for democracy in his motherland. For which he was branded a dissident, prohibited from touring abroad, and ultimately stripped of his Soviet citizenship and sent into exile.

Once he was free in the West, Rostropovich underwent a remarkable change that was evident to all who saw him. It was as if a great weight had at last been lifted off his shoulders. The inner demons were gone, the tempestuous and brooding cloud had finally dissipated. Rostropovich became visibly relaxed, began to smile, and seemed to finally be enjoying life instead of constantly struggling with it. There are those who would say that his playing lost some kind of indefinable “edge” after this, but none would argue that he didn’t remain the finest living cellist on earth.

Rostropovich was visibly more relaxed in exile

In his decades of exile, Rostropovich seemed to be everywhere at once in the musical world, living the artistic freedom he had so longed for. With his boundless energy reinvigorated, he maintained a rigorous performing schedule, conducted the National Symphony Orchestra in Washington DC from 1977 to 1994, founded and directed numerous music festivals, and did a great deal of volunteer charity work worldwide.

When he saw the fall of the Berlin Wall on television, Rostropovich knew he had to be a part of this historical event. He packed his cello and flew off to Berlin to give an impromptu street concert right underneath what was left of this symbol of oppression and tyranny. And when the new-found freedom in his homeland was threatened by a reactionary putsch, Rostropovich knew he must go back home, to stand and be counted among those who valued personal freedom and democracy.

Rostropovich played at Checkpoint Charlie as the Berlin Wall came down

Mstislav Rostropovich was living proof that Russians do value freedom and do flourish when they have it and suffer when they must live under the yoke of tyranny. His passing, perhaps even more than that of Boris Yeltsin, marks the end of an era of Russian heroes of democracy.

Below is the introduction and first section of a new paper published in the Fordham International Law Journal I have authored along with my respected colleague and friend Geert-Jan Alexander Knoops, whose distinguished career both as a Professor of International Criminal Law (Utrecht University) and as a defense counsel in international criminal courts for Yugoslavia, Rwanda, and Sierra Leone is unparalleled. He also was recently involved as an expert witness in the historic Hamdan v. Rumsfeld Case at Guantanamo Bay.

Click here to download the complete PDF with footnotes

THE DUALITY OF STATE COOPERATION WITHIN INTERNATIONAL AND NATIONAL CRIMINAL CASES

By Geert-Jan Alexander Knoops & Robert R. Amsterdam

INTRODUCTION

This is the first of a series of articles seeking to elaborate responses to challenges to the rule of law. The authors consider certain of the greatest of these challenges to center around illegitimate control of State organs by groups capable of infringing presumptive rights granted under treaty to States that in a systematic and continuous way resort to abuse of process. This Article, dealing with the equality of arms, is therefore only the first of a series exploring both this problem and the manner in which it may be addressed. Whether this concept is dealt with under the theoretical template of the “Dual State” in Europe, or what we have called “State capture” in Latin America, the challenges for defense lawyers will only be heightened in coming years.

I. THE DUAL STATE AS A NEW CHALLENGE OF STATE COOPERATION WITHIN INTERNATIONAL AND NATIONAL CRIMINAL PROCEEDINGS

During the last decade, several international criminal tribunals were established, such as the International Criminal Tribunal for the former Yugoslavia (“ICTY”) and the International Criminal Tribunal for Rwanda (“ICTR”). In July 2002, the permanent International Criminal Court (“ICC”) in the Hague became operative. In 2002, another category of tribunals also came into existence: The so-called mixed, hybrid, or internationalized criminal courts, such as the Special Court for Sierra Leone (“SCSL” or “Special Court”). The latter category of tribunals consists of national and international judges who administer justice based on rules of procedure, which themselves are a mixture of national and international procedural rules. Within the proceedings before all these types of tribunals, two procedural pillars are of perennial concern and importance.

The first procedural pillar is the element of State cooperation, without which international criminal proceedings cannot effectively function, seen from the perspectives of both the prosecution and the defense. The second procedural pillar is an effective enforcement of the principle of equality of arms, which is decisive for the administration of fair proceedings. It can be said that without the first pillar, State cooperation, the international tribunals can de facto not function. The same goes for the endorsement of the principle of equality of arms. Consequently, that principle should have self-executing effect on the first pillar: State cooperation. In the absence of such self-executing effect, State cooperation cannot proceed in a fair manner; and, thus, fair trials before these tribunals are jeopardized.

This Article focuses on the interrelation between State cooperation and equality of arms as basic pillars of international criminal proceedings. This interaction is analyzed from the perspective of its importance for the effectiveness of the practice of international criminal proceedings. State cooperation before international tribunals, in which procedural equity is fully guaranteed, seems an almost unachievable aim since, as a function of their sovereignty, States apply a form of selectivity thereto. It can be questioned whether such a form of duality indeed occurs within the practice of international tribunals dealing with matters of State responsibility. The same goes for national criminal proceedings regarding evidence obtained through State cooperation, such as mutual assistance in criminal matters. In other words, it could be questioned whether State cooperation on both the international and national levels is nothing more than a reflection of the phenomenon of the so-called “Dual State,” a concept that was developed by Ernst Fraenkel.

Ernst Fraenkel was a German political theorist who immigrated to the United States in 1939. In 1941, he published The Dual State, in which he describes the coexistence of legalism with an illiberal political regime in Nazi Germany. Fraenkel portrays the political system in Nazi Germany as a combination of the “Normative State,” defined as a rational State governed according to clearly elaborated legal norms, and the “Prerogative State,” defined as a State which exercised power arbitrarily, unchecked by law. The entire legal system was prone to exploitation as an instrument at the disposal of the political authorities, even though “insofar as the political authorities do not exercise their power, private and public life are regulated either by the traditionally prevailing or newly enacted law. The Normative State was to be sustained as a precondition for economic stability, while the coexistence of the Prerogative State preserved the capacity to eliminate or neutralize enemies and perceived threats.10 Fraenkel notes the growing friction throughout the 1930s between proponents of the Normative State and proponents of increased authoritarianism.

Fraenkel’s analysis of the Dual State also describes how the Prerogative State stifled public opinion. The insidious side of the Dual State “thrives by veiling its true face,and, therefore, public discussion must be reined in. Fraenkel refers to the records of judicial proceedings to demonstrate the creeping dominance of the Prerogative State. His analysis shows that the courts were responsible for assuring the maintenance of “capitalist order,” even though the Prerogative State occasionally exercised its ability to deal with specific cases in the interest of expediently achieving its aims. The Prerogative State accepted that the courts were necessary to assure entrepreneurial liberty, the sanctity of contracts, private property rights, and competition; but this did not mean that the courts or the law were inviolable. Indeed, according to Fraenkel, the abolition of the inviolability of law was the chief characteristic of the Prerogative State.

Clearly, there are limits to the application of Fraenkel’s theory of the Dual State to modern States: The goals of the Prerogative State in the Third Reich were uniquely horrific. This theory retains value, however, when applied to modern States, and, more relevant for the present analysis, when applied to issues of State cooperation. Although State cooperation is governed by legal rules, this same cooperation can also be used by political authorities as an instrument to influence the underlying legal system.

Transposed to the subject of State cooperation, the concept of the Dual State implies that, despite the normative value and safeguards of certain legal mechanisms in terms of checks and balances, the entire legal system can become or de facto function as an instrument at the disposal of the political authorities. Seen from this legal-philosophical perspective, the issue of State cooperation is subject to realpolitik and can serve political authorities to influence the outcome of international criminal trials.

This Article assesses whether and to what extent State cooperation, both before international tribunals as well as within the system of mutual assistance in criminal matters, is vulnerable to these motives of realpolitik, while at the same time examining its impact on the principle of equality of arms.

KAL's weekly cartoon from the Economist:

In the first of a series of posts I plan on doing in regards to Vladimir Putin's Annual Address to the Federal Assembly (Mark Mackinnon has already blogged about it), I wanted to address a claim that proceeds from the sales of Yukos assets would be dedicated toward the State budget for a housing program.

Here is what the President said:

If we wish to move ahead we therefore must find additional sources of financing, at the very least for repairs, and for resolving an issue we cannot delay – that of moving people out of housing that is no longer fit for habitation.

It would be amoral for the state to ignore these problems. A country with such big reserves built up through oil and gas revenues cannot accept to see millions of its citizens living in slums.
...
Of course, the question arises, where will the money come from?

First, we have the money. Spending decisions are always just a matter of the choice of priorities at federal and regional level.

Second, I have a concrete proposal, namely, to allocate considerable additional revenue to these tasks, including revenue obtained through improved tax collection, from the privatisation of state assets and also, perhaps, from the sale of assets belonging to YUKOS in payment of its debts to the state.

Creating a stronger public housing program is all well and good, but this suggestion that such a program would see a single ruble from the Yukos auctions is a big stretch. Such a claim plays into the "nationalization" myth of Yukos, which works to give the State popular approval to steal because citizens are under the illusion that the public will somehow benefit.

The Russian Federation has gone to great lengths to try to legitimize the illegal seizure of Yukos assets, from forcing foreign companies to participate in stage-managed auctions to selling shares of Rosneft on the London Stock Exchange – but the latest whitewash effort by the authorities to claim that proceeds from the Yukos auctions will go into the State budget is the perhaps the most preposterous to date.

As an attorney representing Mikhail Khodorkovsky, I challenge the RF to demonstrate where Yukos’ tax payments have gone and where the proceeds of the Rosneft flotation and other sales of Rosneft shares have gone.

With this absurd claim, the Russian authorities are trying to don the mantle of public interest and nationalism to cover up the fact that a small group of siloviki insiders are lining their own pockets with these funds. The theft of Yukos hasn’t benefited the Russian people one iota – it only created a new class of oligarchs who enjoy the impunity of working within the Kremlin. That impunity, however, cannot last forever.

Twenty Chechens and One Khodorkovsky

Grigory Pasko, journalist

Convict Denis Yurinsky was the first work supervisor for convict Mikhail Khodorkovsky at Krasnokamensk general regime colony No. 10. It was during Denis’s watch that all manner of provocations took place with Mikhail Khodorkovsky on the part of the colony administration. Denis knows about these provocations firsthand, like he does about what colony No. 10 is really like. The procedures in this colony are interesting also because the Putin power seems to have every intention of sending Khodorkovsky right back to Krasnokamensk after his second show trial. Simply because this is the most inaccessible of all the Russian colonies.

Denis Yurinsky was released last year. At present, he resides 140 kilometers from Chita. I recently had a chance to meet with him, and here is what Denis told me about himself, the colony, and the people who live there.

Photo of Denis Yurinsky by Grigory Pasko

I’m 25 years old. They locked me up at age 16 for murder. I was born in Krasnokamensk. I did more than eight years. That was my first time in jail, and I hope it will be my last. At first I did time in a colony not far from Chita, and then at No. 10, in Krasnokamensk.

Of course it was hard to learn what the world behind the barbed wire is like at such a young age. Eventually I got used to it. A colony is a small world with its own laws. Laws that are established by the prisoners themselves, and the laws of the colony administration. They rarely coincide in anything. By the way, the laws of the administration are far from always the same as the laws that have been adopted by the state.

Which laws are more just? That’s hard to say. For example, thou shalt not kill and thou shalt not steal – that’s from the Bible. And in the criminal world, stealing from a convict is also punishable. Someone who steals from a comrade is a rat. True, the punishment for ratting is different, a lot more severe.

And another thing. Zeks don’t punish innocent people, in contrast with the state.

Yes, I also sat in the punishment isolator. You can end up there for just about anything. You can’t smoke in an unauthorized area, and there’s a whole slew of unauthorized areas. You can’t talk when you’re in lineup and on the parade ground. But in the colony we’re always either in lineup or on the parade ground.

How does the day go in the colony? Well, you should know what it’s like yourself, but let me tell your readers. Reveille at 6 o’clock, you make your bed, breakfast, and go off to work… I had it easier: as a work supervisor, I lived on the territory of the industrial zone. I had my own room there. So after a certain point I was “denied the pleasure” of having to get in a lineup for another roll call a hundred times a day.

I was a work supervisor; I had over a hundred people under me. We worked in the sewing shop: cutting, sewing camouflage uniforms for police and employees, bedding… Before that I sat at a sewing machine myself for five years; I can sew practically anything.

We had lunch in the work area at 11 o’clock. In the “zone” it was at 12. At 2 o’clock – the mid-day roll call. They do a head count of the entire colony, without going out of the situation of the facilities. If the numbers don’t match up, the zone just stands there while they search for each and every single person. We had times where we’d stand like that for half the day. We had some escapes – mostly the non-convoyed ones. Convicts didn’t escape from the zone – they were simply shot. If a zek escapes, the vertyhai* will get strung up from the watchtower. So it’s just easier to shoot the escapee.

After supper, everybody does his own thing. Some read, some wash, people do whatever… And that’s how the days pass by. And that’s how life passed by.

My first meeting with Khodorkovsky went like this. Once they announced to everybody in the camp: get everything in order, a big commission has arrived. They were getting the camp ready for something, they were putting everything in order, even the cops [as the zeks call the colony staff – G.P.] were taking out garbage. They were saying that they were bringing 20 Chechens. Then the stage arrives and I see that they’ve brought just one guy. In glasses, average height, squat and compact. I says to the cops – that’s all your Chechens? That’s how I found out that they’d brought Khodorkovsky.

They usually put all new arrivals in quarantine for 15 days, in separate barracks. Only then do they bring them out into the “zone”. Mikhail Borisovich was brought out to barrack No. 8. Then he ended up on my work team – a packer of finished output. He packed bedding, folding it up. We chatted, a normal guy. I called him Misha. There’s no such thing as using formal address, or calling someone by name-and-patronymic [e.g. Mikhail Borisovich – Trans.], among zeks. It’s easier to use the informal form of address, and that’s the customary way. Yes, I noticed immediately that this is a guy who isn’t afraid of work.

He came in 2005, in the autumn. The two of us worked together for nearly a year. Until August 2006. Everything that took place with him took place on my watch. I even took part in one process, when they were removing Yevstratov, the chief of the colony. The first time they locked up Khodorkovsky for not being at his workplace. He came to me, he asks how the sewing machines work. And right then the duty guard shows up – to do a head count of people at the workplaces. And that’s how Khodorkovsky ended up in the punishment isolator. This had never happened before, that they locked someone up in the punishment isolator for something like that. I was often not in one place. My workplace was the entire industrial zone. And lots of people can come and go like that – on business. The fact that they locked Mikhail up – this was a special action, they were looking for a reason to lock him up.

I then found out through my sources that there was an instruction from above: Khodorkovsky has to have one constant violation of the rules of confinement. It doesn’t matter for what. What matters is that it be and that it be all the time.

So the cops tried hard. But Mikhail Borisovich is no fool, and had learned a lot in Matrosskaya Tishina. He wouldn’t let them pull a fast one on him, he’d studied the laws well. So sometimes they even fired staff who, I guess, weren’t able to handle the assignment – to announce reprimands to him.

The incident with the lemons – you know, when Khodorkovsky shared with someone – is also wild. They say that they specially invented a new edict about the alienation of other’s property just to punish Mikhail. This is how they explained it: if you give someone a smoke, for example, then you’re driving him into debt. Total drivel! We’ve always given and have always shared everything, because that’s how it’s always been done. Even the staff gave us cigarettes. But after this edict some kind of idiocy started to take place.

In short, they punished Khodorkovsky specially the second time too.
I can’t imagine that every convict in every Russian colony is carrying out this edict.

The third incident was the one with convict Kuchma. Yevgeni was his name. He was with Khodorkovsky in the 8th detachment. I’ve known him a long time. Kuchma lived in Chita before the colony. Now, rumor has it, he’s in another “zone”.

“The situation, as I understood it, was like this: Kuchma had entered into a conflict with certain criminals. And he needed to come up with a reason for them to transfer him to another “zone”. I don’t know if he thought of that himself, to stab Khodorkovsky, or if someone suggested it to him. But it worked. He stabbed Mikhail, and they transferred him to another colony. They didn’t even throw him in the punishment isolator. But they let fly a rumor that Khodorkovsky had paid him 500 dollars to create such an incident, so that Khodorkovsky would end up looking like a martyr.

Dozens of commissions came to the colony after they’d brought Khodorkovsky there. So Yevstratov had no chance to hold on to his job as chief of the colony. I heard that they’re already locking up some of the staff too. This has to do with the fact that their relations among each other have gotten more brutal. They’re all being searched, stripped down to their underwear. It didn’t used to be that way. Before they could probably even bring an elephant into the “zone” for the prisoners. No more. And after they’re fired, they’ll never be able to get a job as a cop anywhere else ever again.

Yes, I know that Khodorkovsky is now sitting in the investigative isolator in Chita. Different people have different feelings about him. I’m positive about him, because I’ve had a chance to talk with him and see what he’s like in real life. He told me how he’d earned his money. People will never understand this. They don’t believe that you can earn big money honestly. And then there’s those who think that this is all just politics, that he’s an opponent of Putin’s.

I got early release. I literally bough my release with camouflage. I sewed a good uniform, and they did the documents for me for this.

Now I’m married to a woman with children, I’m busy with the house. If everything will be normal, we’ll have our wedding in the summer.

*Vertyhai (вертухай) – a superintendent in a GULAG zone, a jailer, a convoy guard, an overseer.

Yesterday, the German newspaper Die Welt published the attached article penned by Robert Amsterdam.

Defending Khodorkovsky from Germany

By Robert R. Amsterdam

Would German gas consumers please help to assure the release from prison of Mikhail Khodorkovsky? Rather than address the Russian leadership, which has wrongfully imprisoned my client, I thought I would take this case directly to the people who, perhaps unbeknownst, fund and support the present regime in the Kremlin.

Before you turn to the next article please let me explain. It is the inflated gas prices and great influence of your leading energy companies that have supported a regime that has stolen my client’s company and imprisoned him in Siberia. All the while, German banks have chewed at the carcass of Yukos. They have assisted in the illegal plunder of the company by helping to float its assets on foreign markets, and financing shady bids and deals led by state-controlled companies Gazprom and Rosneft.

When I use words such as “stolen” and “illegal”, their use is intentional and not simply an exaggeration. No credible legal opinion exists which can legitimise the destruction of Yukos. The state’s expropriation of the company violated fundamental Russian laws, from the Constitution and all the way down the hierarchy of laws. This was a grand-scale theft by state officials and others who abused public institutions in order to achieve their criminal aims.

From the Nord Stream pipeline, which is a political project of the Kremlin bereft of economic rationale – just ask your leading energy experts – to the mute response to the expropriation of Shell at Sakhalin and other threats to foreign property rights in Russia – the silence of Germany has only emboldened the Kremlin, which now displays increasing hubris and lack of concern for what the world thinks of it. Racism has become part of official discourse while peaceful protesters are pummelled and a phoney election is being conjured by the wizards behind the Kremlin walls.

The Baltics, Poland and Georgia are all under various forms of economic sanction and Germany – the de facto leader of the EU – watches as its ex-Chancellor becomes the poster boy of President-Putin-the-flawless-democrat. Mr Schroeder has had some successes in his new mission as the Kremlin’s crusader. He has for instance won over the prime minister of Hungary, who has now mouthed that famous incantation of energy security: “President Putin is a great democrat!” (to be repeated 3 times quickly in front of cameras). Once these magic words are repeated the political leader clicks his heels and he is in a land of cheap energy and no rule of law to bother with.

This support of the Kremlin campaign originates in Germany and is based on the cartel-like gas arrangements which have allowed Gazprom to profit directly right along with Germany’s leading energy companies who profit handsomely through a fifty-fifty deal on nearly the entire mark-up. Meanwhile, German energy companies and banks have worked with Gazprom to take over energy infrastructure from countries that cannot afford newly hiked bogus market rates.

So it is to Germany that one must turn in dealing with the Kremlin. Mr Khodorkovsky was found guilty in what was no less than a show trial – as certified by your former Justice Minister Sabine Leutheusser-Schnarrenberger. He has since been stabbed in jail, kept in solitary confinement for varying periods, and banished some 6000 kilometres from home contrary to Russian law. He is now being returned to Moscow to face further bogus charges as the authorities seek cover for the theft of Yukos’s remaining $30 billion in assets.

Messrs Putin and Schroeder actually try to justify this treatment by saying he was an oligarch and that he stole Yukos. Yet the facts get in their way. Mr Khodorkovsky took incredible risk in taking over Yukos, which was a ramshackle company deeply in debt. What the Kremlin stole from Mr Khodorkovsky was not what they sold him years prior, but rather the billions of dollars of value added under his tenure, after he worked for years to build Yukos into one of the world’s leading new oil companies. Yukos’s growth was no foregone conclusion – as can be seen by the sputtering performance of state-controlled Rosneft over the same period. Unfortunately for them, Mr Schroeder and the group he now works for cannot boast the same performance for Gazprom as it stumbles along in developing infrastructure. This explains why instead of focusing on exploration and development methods, they are so desperate to expand their most effective growth tactic they have: a practice that is known in the West as expropriation.

So I say to those who are complicit with the gaolers of my client: he may be the one behind bars, but it is you who are as well a hostage. My friends, demand the break-up of the cartel that strangles German energy consumers and it is your job to control Germany’s one-sided relationship with Moscow. Let the world know that Russia’s new racial laws, incarceration of political prisoners and destruction of electoral democracy is too expensive a price to be paid.

Yesterday I had the honor of participating in a speaking panel on philanthropy organized by the Policy Association for an Open Society (PASOS) and Radio Free Europe/Radio Liberty along with George Soros, Zdenek Bakala, Vazil Hudák, and Alexandr Vondra, among others.

Among other comments, Soros expressed his admiration for Mikhail Khodorkovsky as a courageous philanthropist who made a strong contribution to building an open society in Russia - and we owe it to him to protest his treatment. Vazil Hudák, who is the Vice-President of the Central/Eastern Europe and the CIS department of Citigroup, mentioned that it wasn't possible for individual banks to act alone in the destruction of Yukos and the auctions of its assets. Hudák suggested that a dialogue should be opened up with the banks to better plan for collective actions.

On my behalf I talked about human rights in Russia in the context of corporate governance and responsibility. It was my argument that Russia has experienced a tragic regression in terms of transparency, and these muddy, unclear rules for accounting and decision making in businesses (especially companies with state participation) contributes to an environment of lawlessness, which has a negative impact on human rights. The example of what happened to Khodorkovsky poignantly illustrative of why Russia needs to improve corporate governance.

From an FT editorial on Vladimir Putin's decision to suspend the Nato arms pact.

However, yesterday's decision is strategically important because it signals Russia's growing readiness to tear up the post-1990 diplomatic order. Moscow believes today's strong Russia can revisit the deals done in the 1990s by a weak Russia. The Kremlin also argues the US has repeatedly acted unilaterally, including over Iraq and over recent plans for Czech and Polish missile defence bases. If the US can set aside bilateral or multilateral pacts, says Moscow, so can Russia.

Today Russian President Boris Nikolayevich Yeltsin became the first Russian head of state to have a church service for his burial since Tsar Alexander III in 1894. The funeral was held at the gold domed Cathedral of Christ the Savior, and was attended by an endless list of dignitaries including Vladimir Putin, Mikhail Gorbachev, George Bush Sr., and Bill Clinton.

Stalin hoped to build a skyscraper on this same lot to rival the Empire State Building

Like many places in Moscow, it seems hard to escape history, even for the funeral of Russia's first elected president. On this very spot in 1931, Josef Stalin sought to outdo the arrogant hubris and engineering marvel that he saw as a challenge when the Americans completed the Empire State Building in New York, and ordered in that the beautiful 19th-century cathedral be dynamited in order to construct his grand vision: The Palace of the Soviets, the grandest of all monuments to socialism, was an elaborate building designed by Boris Iovan which would dwarf the Empire State Building and place a statue of Lenin on top of the tallest structure raised by the hand of man. However, after blowing the Cathedral to smithereens in a historically unprecedented blunder, Stalin discovered that the soil on this plot of land could in no way support such a structure, and the project had to be scrapped decades later to build a swimming pool. Thanks to the push from Moscow's aggressively pro-development Mayor Yuri Luzhkov, the reconstruction of the cathedral was completed in August of 2000.

I imagine it would give Boris Nikolayevich a big smile to know his funeral was conducted on such a symbolic site of Soviet incompetence.

Coinciding with a plethora of op/eds today either singing the praises of Boris Yeltsin or condemning his weaknesses (some articles did both), Deputy Prime Minister and presidential hopeful (is it possible to “hope” for a non-democratic appointment?) Sergei Ivanov slipped in an editorial in the Wall Street Journal appealing for Russia’s admission of membership to the OECD (see earlier post with photos and quotes).

Russia should become an OECD member, but not until major improvements in rule of law, democratic freedoms, and market reforms are made

Despite some disagreements I have with the current Administration’s policies, it has long been my argument that Russia deserves to have its rightful place at the table in the international community in a manner reflective of their global importance, and should be integrated into as many rule-based environments as possible to help encourage an effect of institutional spillover into domestic legal and regulatory bodies. However, the case of the OECD is one in which I draw a very clear line in the sand.

Lavrov’s appeal is reasonably well written and contains some good arguments: thanks to record high oil and gas prices, Russia’s economy has been very dynamic over the past ten years, and its large foreign reserves and open exchange market are admirable. Lavrov is also right to point out the geopolitical heft Russia has gained from becoming an arbiter in various international disputes (regardless of whether we agree with the specific decisions, the new foreign policy activism cannot be denied).

However, Lavrov’s appeal also contains a number of assertions that border on the absurd. Through these rose-tinted lenses, Russia is a “democracy,” with attractive conditions for foreign investors even in the oil and gas industry. He writes that no “prejudice or ideology affects our approach to foreign affairs,” and that Russia has proven itself to be a “reliable partner.”

Most important of all, this article is mistaken in assuming that Russia currently meets the criteria for OECD membership as outlined in the Noboru Report. The report says that the criteria for eligibility for membership in the OECD is based on “like-mindedness” and “significance” – and while Russia probably wouldn’t have to argue very hard for the latter, the former is quite a difficult proposal.

The two fundamental yardsticks for the “like-mindedness” criteria are 1) market-based economy, and 2) democratic principles, and Russia has neither, a fact so poignantly expressed both by the recent fraudulent Yukos auctions and interventions on Royal Dutch Shell and BP, as well as the truncheon-wielding crackdown of a modest march of democrats.

Mr. Lavrov’s words reflect the Kremlin’s improbable belief that you can fool all of the people all of the time, and that is just not the case. Russia is perhaps today the greatest force in the world against transparency and free markets. It is literally written into the DNA of the state corporatists who are presented put in charge of the approximately 40 areas of the economy that the state has deemed to be “strategic” – meaning that intervention is necessary to dominate, control, or outright steal from individuals and companies working in these areas.

Those in the Kremlin should read the OECD guidelines on state-owned enterprises, and compare the independence rules contained therein to the sorry state of affairs in Russia, in which the president’s closest friends from his former career as a spy making multi-billion dollar decisions regarding the future of critical industries as a second job, after they finish their full time job of discharging their cabinet duties.

Russia indeed deserves its place at the table, and I would very much like to see them get there – but tolerating the anti-market, authoritarian status quo is not helpful to anyone, inside or outside of Russia.

Today's Sergei Lavrov column in the Wall Street Journal appealing for membership in the Organization for Economic Co-operation and Development contained a number of statements that we could help but choose some images to accompany. Stay tuned for a comment from Bob Amsterdam on the article.

Lavrov: "In fact, many Russian laws and regulatory norms -- including those for antitrust and tax legislation, foreign investments, banking and more -- have been designed with relevant OECD guidelines and models in mind."

Lavrov: "We are a democratic country with a strong, dynamic, socially oriented market economy."

Lavrov: "This is the proof of the openness and stability of Russia's economy, including its energy sector."

Lavrov: "No prejudice or ideology affects our approach to foreign affairs anymore."

Today FT blogger Gideon Rachman speculates that Russia is itching to manufacture a crisis with Georgia in order to have an excuse to stay in the presidency. Interesting theory, but a long shot, in my opinion.

Does Putin have Georgia on his mind?

Yesterday I had lunch with Mikheil Saakashvili, the president of Georgia. Saakashvili is one of the most media-friendly heads-of-state I have ever come across. He is fluent in millions of languages and seems to enjoy the company of journalists - there were three FT people there yesterday, as well as a smattering of presidential aides.

"Misha" was on jovial form. (The dining room of the Ritz is a convivial spot) But there is no disguising the pressure that he and Georgia are under. Having an angry and paranoid Russia as your neighbour does not make for a relaxing life. Back in March, there was a helicopter attack on government buildings in Georgia's Kodori gorge - which the Georgians assume was the work of the Russians. The Russians claim the Georgians attacked their own buildings to make Russia look bad.

Saakashvili claims that he is doing his utmost not to goad Russia and says that he is determined not to say provocative things in public. But since the Georgians are obsessed by the Russian threat, they find it hard to keep off the subject.

When somebody around the table expressed the opinion that Vladimir Putin would try to find an excuse not to step down as Russian president next year, Saakashvili mused - "Well he would need some sort of crisis to justify doing that. I wonder where he could find that?" Then he laughed darkly. The Georgians clearly reckon that the Russians are itching to manufacture a crisis with Georgia - and the continuing controversy over the Russian-backed breakaway province of South Ossettia is an obvious potential source of trouble.

And while Saakashvili is doubtless sincere in his desire to avoid doing anything on a day-to-day basis that will provoke the Kremlin, there is one Georgian policy that the Russians regard as a standing affront - and that is Georgia's unshakeable determination to join Nato. The Georgians hope that they can achieve their ambition by 2009. But having yet another part of the old Soviet Union join Nato will feed Russian fears of encirclement.

Saakashvili reckons that the Kremlin is already feeling paranoid about political developments in western Europe. In the last two years, Vladimir Putin has lost three firm friends - Gerhard Schroder in Germany, Silvio Berlusconi in Italy, and now Jacques Chirac in France. The Georgians reckon that Nicolas Sarkozy, who seems likely to succeed Chirac next month, is very sound on Russia and a firm friend of Georgia.

But if Georgia really does join Nato, the US and the western Europeans may one day have to consider just how far their friendship extends. Nato is based around the mutual defence guarantee of Article Five. If the Russians were to launch a helicopter-gunship attack on Georgia - once the Georgians were actually Nato members - would we all rush to the defence of Georgia, even at the risk of a military confrontation with Russia? Or would the other Nato members decide that, in the last resort, this is "a far-off country of which we know little."

The 10th Russian Economic Forum in London could be the last

By Derek Brower, journalist

IT ENDED as it began: not with a bang, but a whimper. And it could be the last time London hosts a Russia Economic Forum (REF), predicted some of the delegates attending the event earlier this week. That it was overshadowed by the death of Boris Yeltsin was, perhaps, fitting. A legacy of the Yeltsin era, the REF, with its reputation for frank speaking and political controversy, was beginning to look like a misfit in the Putin period.

The list of those who withdrew under pressure from Moscow was impressive. No Sergei Bogdanchikov, head of Rosneft. No Alexander Medvedev, of Gazprom. No German Gref, trade minister of Russia. And so on. The list even included foreign businessmen, like Fulvio Conti, of Italy’s Enel. This year’s REF became an event not to be seen at. Alexander Lebedev, one of the only major politicians to turn up, wondered aloud whether he’d be allowed to return home afterwards.

Many of those did attend also seemed keen to ensure it wouldn’t be held against them. A host of bankers reiterated a common line, that “stability” under Putin had become key to Russia’s remarkable economic growth and the rapid growth in mergers and acquisitions activity in the country last year (worth some $70bn, according to Ernst & Young).

But the fluff bored some listeners. “Too many investors talking up their portfolios,” said one delegate about the forum’s first day. “They would say that, wouldn’t they.”

Amid the banality of the opening session, the greatest controversy came when a Dow Jones reporter took exception to the repeated inference that journalists were somehow to blame for the negative image of Putin’s Russia. “Did journalists cut off the oil to German refineries earlier this year?” he asked. “Did journalists kill Alexander Litvinenko?” To applause in the auditorium – and admiration in the press room – he concluded by asking how the Kremlin could expect reporters’ cooperation when “journalists continue to be killed with impunity”.

His question was directed to Hans-Joerg Rudloff, chairman of Barclays Capital and one of Putin’s most dogged cheer leaders. Rudloff had earlier warned Russia that its economic boom could be unsustainable. But put on the spot, he praised Putin’s government further, dodged the awkward questions, and advised simply that journalists “be fair”. More applause.

How to lose friends and influence fewer people
That journalists are to blame for Russia’s ills was a refrain repeated many times at the forum. Ironically, given such concerns among its supporters, the Kremlin decision to boycott the event – and probably sink it for good – hardly helps to redress the image problem. Not even Rudloff or the enthusiasm of Renaissance Capital and other heavyweights from the Russian investment scene could prevent the REF from becoming another PR blunder.

Russia’s political risks were the elephant-in-the-sitting-room of the forum. Everyone knows it is the main issue, but no-one wants to talk about it. Few speakers strayed far from statistics about Russia’s growth and economic potential. Lots of talk about mega-salaries and new headquarters in Moscow; not much talk about human rights or press freedom; and only veiled references to economic nationalism and corruption. The closest many of the key-note speakers got to voicing criticism of the direction of Putin’s Russia was a plea from Alexei Gurin, chief executive of tyre maker Amtel-Vredestein, that the country diversify its economy.

Real criticism was left to a handful of Russia’s remaining prominent critics, who enlivened the forum’s last afternoon with a heated discussion of the 2008 “succession question”. The absence of the Kremlin’s heavy-hitters surrendered some of the rhetorical ground to these speakers, which included Boris Nemtsov, a former prime minister and close ally of Boris Yeltsin, Lilya Shevtsova, from the Moscow Carnegie Centre, and Andrei Vasiliev, editor-in-chief of Kommersant.

Nemtsov told a crowd gathered to hear a discussion about the presidential elections in 2008 that Putin had systematically rolled back all of the reforms of the Yeltsin era. Censorship has replaced liberty, he said, and nationalisation has replaced privatisation. And in international relations, the Kremlin had squandered all of the good will that Yeltsin’s presidency had gained. “His physical death comes after the destruction of everything that he achieved.”

“Yeltsin will be remembered in history as an outstanding figure who tried to liberate Russia. I don’t know what Putin’s legacy will be,” he said.

Such enthusiasm for Yeltsin is hardly widespread in Russia, where the image of the Yeltsin years for many remains one of chaos and corruption. But, said Shevtsova, the apparent stability of the Putin regime could soon be undermined, too.

That is because it remains in the President’s interests to ensure that no clarity over the succession issue emerges, she said. “Putin cannot allow certainty because he would become a lame duck president.” That logic remains behind the cultivating of “horizontal” competition – such as the apparent race between the two presidential hopefuls Dmitry Medvedev and Sergei Ivanov; or the balancing of factions in the Duma – as a means of retaining his own “vertical” power.

Such uncertainty is one of the paradoxes of Putinism, said Shevtsova. Business likes stability, but Putin’s own strategy could undermine it. And she predicted that after 2008, a new regime could unleash its own fundamental changes, just as Putin had done after Yeltsin.

Eventica, the REF’s organisers, will hope that such uncertainty means next year’s forum, scheduled to take place after the presidential elections, remains in demand. But in the fog of Russian cigarette smoke outside the conference rooms, others lamented the passing of an era. “The forum is finished,” said one delegate. “Next year it will be in Petersburg or nowhere.”

La Russophobe has posted a translation of an important opinion article by Andrei Illarionov, formerly one of Vladimir Putin's most senior economic advisors who resigned in protest of his policies at the end of 2005, published recently in Yezhednevniy Zhurnal. On November 20, Illarionov and Robert Amsterdam participated in a speaking panel on Russian energy policy at the Cato Institute - a video of the event is here, and a magazine article (Cato Policy Report) from their speeches is here.

Approaching Zimbabwe

By Andrei Illarionov

In Russia a new model has been formed for the government, economic and socio-political order – the Power Model (silovaya model’). It is a model distinct from any seen in our country before, including at the beginning of this century or in the 70 years of Communist power. While much as been said and written about the separate elements of this system, its treatment as a whole has been lacking.

What are the basic characteristics of the Power Model? In this model, the entire body of state power has been taken over by a group called the “siloviki”, which includes not only the “siloviki” themselves [TN: generally understood to be current and former intelligence officers], but also intelligence service collaborators, members of the Corporation of Intelligence Service Collaborators (Korporatsiya Sotrudniki Spets-Sluzhb) – the KSSS. [TN: A play on the initials of the late Communist Party of the Soviet Union, or KPSS.]

As in any corporation, members of the KSSS have both individual and group interests. For example, on issues surrounding the ownership of one or another asset seized by the Corporation, ferocious arguments take place between its members. But the intensity of conflict within the Corporation is much weaker than between the Corporation and the rest of society.

Because the Corporation preserves the traditions, hierarchies, skills and habits of the intelligence services, its members show a certain degree of obedience, loyalty to one another, and discipline. There are both formal and informal means of enforcing these norms. There is, for example, something like an “omerta” [TN: Mafia term for a code of silence]. Violators of the code of conduct are subject to the harshest forms of punishment, including the highest form.

Members of the Corporation exude a sense of being the “masters of the country” and superior to other citizens who are not members of the Corporation. Members of the Corporation are given instruments conferring power over others – membership “perks”, such as the right to carry and use weapons.

The Corporation has seized key government agencies – the Tax Service, Ministry of Defense, Ministry of Foreign Affairs, Parliament, and the government-controlled mass media – which are now used to advance the interests of KSSS members. Through these agencies, every significant resource of the country – security/intelligence, political, economic, informational and financial – is being monopolized in the hands of Corporation members.

The legal order, previously much in doubt, is now being destroyed completely and replaced by new “rules of the game”, the main one being “selective enforcement of the law.” KSSS members have been placed above the law. The ideology of KSSS is “Nashism” (“ours-ism”), the selective application of rights.

In economics, the efforts of the KSSS are focused on strengthening and advancing quasi-governmental monopolies (governmental in form, privatized in essence, but not formally under the control of any governmental agency), the main purpose of which is the privatization of profits and the nationalization of losses. A strong government-private partnership gathers revenues in order to force nominally private businesses to fulfill the demands of the Corporation. Members of the KSSS exercise control over the primary financial flows. The highest reward conferred by the Corporation is appointment of members to positions on the boards of directors of government- and quasi-government-owned companies. This principle holds for all members of the Corporation, whether they are citizens of Russia or former Chancellors of a foreign country.

Read complete article here.

A tidbit from the Washington Post editorial on Yeltsin:

But in the following seven years Mr. Putin has extinguished most of the liberal reforms his predecessor battled for. Once again elections in Russia are a Potemkin fraud, almost all the media follow government orders and dissidents are beaten in the streets, or worse. Moscow again has imperial pretensions: Mr. Putin has tried to annex Belarus and force other neighbors to become Kremlin satellites.

The Russian Power’s Springtime Offensive

Grigory Pasko, journalist

It is known that there is always a large number of policemen on the streets in Chita, where former heads of the YUKOS Oil Company Mikhail Khodorkovsky and Platon Lebedev are being held. And that on those days when the famous arrestees are driven to the oblast procuracy for familiarization with the criminal case materials, the streets of Chita are completely closed to traffic by officers of the road police, so that for a certain period all movement in the city literally comes to a complete stop. Like one local taxi driver told me, there is only one person besides Khodorkovsky who is driven around with such pomp and the creation of such hardships for everyone else – and that is president Putin.

Photo: Putin and Merkel – two leaders with two very different attitudes towards the press (from the Pasko archive)

One local television company was able to capture this whole wild procedure on videotape: the shutting down of the streets of the city, the vehicles with the flashing lights, the police patrols and the security personnel around the procuracy… They say that one of Russia’s central television channels once even aired this video, having bought the story from the local television company. And, as I was told by some actual Chita television people (I won’t give their names here, for reasons that should be self-evident), that’s when the problems started. No, they weren’t shut down or locked up… They were threatened that if they ever again dared to address the topic of “Khodorkovsky behind bars”, they would lose their license.

And so there you have it, an example of freedom of speech a la Putin. Why a la Putin? Because it is he who usually responds to questions about problems with freedom of speech in our country when he is abroad by saying that everything is in order with freedom of speech in Russia. And if someone expresses doubt about this, he snaps back by saying that you foreigners ought to take a better look at yourselves. The sub-text of such rhetoric, of course, is that you foreigners have plenty of problems of your own with free speech.

I don’t know about what problems may exist out there, in Germany for example. I know many German journalists personally, and I have never heard them say that somebody had prohibited them from showing, filming, writing, or talking… And if Angela Merkel were to promise to circumcise some journalist, I’m sure she wouldn’t last very long in her job as Bundeskanzler.

I know a thing or two from personal experience about what the Russian power can do to journalists: I was thrown in jail twice for my publications.

Here’s another example of what the model of power built by Putin looks like:

On the seventeenth day of a hunger strike by six inhabitants of Omsk Oblast, the Oblast government convened an emergency meeting of the editors of the local mass media. The editors were invited for a talk one by one. It was told to them that the topic of the hunger strike is a prohibited one in the region. And the editors were threatened with serious trouble. As was reported by «Novaya gazeta», in the meantime, on 11 April in Verkhny Karbush, more than forty of its inhabitants signed a letter addressed to Omsk Oblast governor Polezhayev, declaring that they were prepared at any moment to support the protesters with action. The villagers demand an immediate response from the power and a cessation of the poisoning of the hunger strike participants and of the persecution of their relatives. On that same day, the petition was passed on to the addressee.

I am confident that the petition will remain without the highest-level reaction of the little regional tsar.

And another example of “freedom of speech”. Very recently, the European Court of Human Rights agreed to hear an application by journalists from the Primorsky Kray newspaper, “Arsenievskiye vesti”. The editor of the publication, Irina Grebneva, and correspondent Nadezhda Alisimchik were found by a Primorsky court to be guilty of slandering the procurator of the Kray, Valery Vasilenko. The motive became a collage published in the paper in November 2003: it depicts a maiden of loose behavior, in whom the procurator identified himself.

It turned out that I know all of the figurants in this case well: the «Arsenievskiye vesti» journalists, and Primorsky Kray procurator Valery Vasilenko, and the local Vladivostok courts… And I also remember the caricature of the “maiden of loose behavior”. From a legal point of view, there is no element of a crime in the actions of the journalists: caricature is a journalistic genre like any other. And drawing caricatures of public figures is permitted everywhere in the world where there is democracy. They say that French president De Gaulle used to get upset when he did NOT find caricatures of himself in the morning papers.

By the way, with the coming of Putin to power, caricatures have disappeared as a genre from Russian newspapers and magazines. And the “Kukly” television show was also shut down: they say that Putin didn’t like it that they depicted him as a puppet.

In the opinion of the secretary-general of the Union of Journalists of Russia, Igor Yakovenko, the European Court will support the Primorsky Kray journalists from «Aresnievskiye vesti» because in Europe, the courts are part of society and defenders of citizens. In Russia, the courts are part of the world of the government officials.

Another example of an attack on freedom of speech: In Kaliningrad Oblast, they have arrested the founder/publisher and editor-in-chief of the newspaper “Novye kolesa”, deputy of the Oblast Duma Igor Rudnikov and the deputy’s assistant, a journalist of that same newspaper, Oleg Berezovsky. They are suspected of libel in the mass media, as well as of violence with respect to representatives of power (in the opinion of the procuracy, the two journalists had beaten up a group of policemen – 22 persons).

As we can see, the power is stooping to out-and-out lies, just to shut up journalists it doesn’t want to have around. I’ve seen all kinds of journalists in my day, of course. And all kinds of policemen. But I still refuse to believe that two journalists could have beat up nearly two dozen policemen.

Among April’s news reports there is also this one: The Union of Journalists of St. Petersburg has asked the city authorities to not allow unlawful actions on the part of the law enforcement organs with respect to journalists during a mass march by opponents of the current power.
As it says in the request, “the union is deeply concerned by recorded incidents of violent actions with respect to employees of the press”.

This appeal is not accidental: we know of numerous incidents when policemen beat up journalists merely because they happened to be present at various kinds of events that the authorities had not sanctioned. In so doing, the policemen had not infrequently smashed the photo cameras and video equipment of the journalists.

These are the facts of the escalation of the offensive of the Russian power against freedom of speech.

And after all that, Putin is still saying that everything is in order with freedom of speech in Russia?

Here's a short news clip from Lou Dobbs on Defense Secretary Gates's visit to Moscow, during which he invited Russia to participate in "an unprecedented level of cooperation" on the development missile shield.

Reading the news clips from Gates's visit sounds like a Dairy Queen ad - characterizing the Russian response as "cool," "cold," and "frosty." I get the feeling that the Russians weren't really expecting to have their bluff called by Gates (who himself said that he felt their response wasn't prepared, and that there was much urgent whispering among the Russian advisors). Russia's response to the U.S. offer shows that in many ways it is more comfortable maintaining a generalized level of confrontation with the United States, which can function as a pressure valve for nationalism, and earn some easy political credits abroad.

However there is a big difference between Russia pursuing an agenda to protect its own security interests, and its efforts to reassert influence over states that it feels rightly belong under their direct control. Irregardless of generous missile and military cooperation offers, it is unlikely that the United States and Russia will share the same view on the so-called spheres of influence any time soon.

"We believe the countries that emerged from the wreckage of the Soviet Union are actually sovereign countries," said the official, one of several senior administration aides traveling with Gates. "We don't believe in spheres of influence."

At the depleted (read near empty) Russian Economic Forum, UK Trade Secretary expressed his unease over the anti-competitive impact of Russian economic nationalism.

About time: UK Trade Rep Alistair Darling is no longer amused by Russia's interventionist antics

Russia must stop mixing politics with business and steer clear of economic nationalism, a British minister said on Tuesday at a Russian business conference that has been boycotted by Russian officials and state-linked firms.

"Commercial considerations should be paramount. Oil and gas companies should not be used to exert political pressure," Trade and Industry Secretary Alistair Darling said at the Russian Economic Forum, the flagship conference for Russian business.
...
"Around the world we are seeing an increasing trend towards protectionism, putting up barriers to trade that will make us all poorer," Darling said. "We are seeing the growth of economic nationalism. It won't work. Protectionism dressed up as patriotism is still protectionism."

The Kremlin's critics say in addition to bullying others with Russia's oil and gas wealth, it has used a variety of underhand means to pursue its energy strategy, including trumped-up environmental claims, vastly inflated back-tax demands and rigged auctions.
...
Darling said investors needed to have trust in Russian law.

"We've got to be absolutely clear that the relationship between our two countries and between the European Union and Russia will only prosper if there's legal certainty, there's openness and that when people strike a deal, the deal is stuck to," Darling told Reuters on the sidelines of the conference.

"But I think it's important that we engage with them in a positive way. Russia actually needs investment from outside. If it's going to get that investment, we've got to be clear what the rules are."

Unfortunately, Secretary Darling, it is precisely this willingness to indiscriminately throw capital into Russia that is preventing any positive changes from taking place. After all, if the current course is being actively tolerated and sometimes openly embraced, who would the leadership be inclined to change?

From the plethora of Western-authored Yeltsin op/ed articles circulating today, Anne Applebaum's "Agent of Change" in the Washington Post rises to the top:

It has become fashionable to turn another 180 degrees and to condemn Yeltsin for corruption and autocracy just as thoroughly as the West once supported him. This is tempting, especially for those who disliked the lionization of Yeltsin as much as I did. But now that he is dead, perhaps it makes more sense not to classify him as a liberal or an autocrat, as friend or foe. For in the longer historical perspective, it is clear that Yeltsin, unlike his predecessor Gorbachev, was a genuine man of transition. He knew things had to change, but he had neither the ideas nor the tools to change them. He had some of the instincts of a populist democrat but all the habits of a lifetime Communist Party apparatchik. He admired Western abundance but never understood how Western societies actually work.

In today's Financial Times:

Observer: Doing it their way

By James Wilson

The Kremlin yesterday continued to deny that it ordered a boycott by senior Russian officials and oligarchs of London's Russian Economic Forum, for years the premier Russian business conference. But Itar-Tass, the state-owned news agency, gave an account that betrayed official Moscow's attitude and could have come straight from the days when the agency was plain Tass, a Russian acronym for the Telegraph Agency of the Soviet Union.

"In recent years the Russian Economic Forum has lost its significance and is no longer a key event in defining economic co-operation between Russia and western capital," the news agency explained in a dispatch. Russia's internal markets, not the London markets, now played the decisive role in investment decisions in Russia. "And precisely because of this, it has become a logical step for the centre of gravity to shift from London to St Petersburg, where the St Petersburg Economic Forum will take place this summer."

The Kremlin has teamed up with the World Economic Forum to try to turn the St Petersburg event into a "Russian Davos". Expect to see Russsian president Vladimir Putin lead a phalanx of Russian ministers and businessmen at the event in June.

Fulvio Conti, CEO of Enel

Earlier this year when ENI and Enel became the first foreign companies to own the stolen assets of Yukos, it would seem to fair to ask exactly who was acquiring what. It seems not so much that the Italians actually acquired property - but rather that the Kremlin acquired proxies to do their bidding.

Take for example, Fulvio Conti, CEO of Enel, and by all accounts available, a talented and impressive executive with an admirable career. But now, since getting into bed with the Russians on the theft of the century, he isn't even allowed to attend his own speaking engagement at the Russian Economic Forum in London! What's next? Asking his new employers in the Kremlin for permission to use the restroom?

Somebody immediately put a memo on the Russian president's desk - "Next time you want to withdraw a high ranking delegation to a business conference at the last minute as a political gesture, try to measure the costs vs. the benefits!"

The opening day at the Russian Economic Forum in London could certainly have used some stronger representation from the state! Ouch! From a Rosneft boardmember nonetheless!

FT: Russian boom ‘will end in pain’

Russia’s financial boom will come to a painful end “in the near future”, a leading London banker with long experience of the country warned on Monday.

After seven years of growth, Russia was reaching its capacity limits in an expansion fuelled by credit, much of it from foreign markets, said Hans-Joerg Rudloff, chairman of Barclays Capital, the investment banking arm of Barclays .

“It is a boom which is not sustainable and I have to warn people ... there will be downturns. There will be more difficulties,” Mr Rudloff told the Russian Economic Forum in London.

...

Mr Rudloff said: “Financial markets will always react excessively ... There’s no soft landing after such excessive rewards and ... I would say the last seven years [have been] rewarded somewhat excessively and ... the present boom will be penalised somewhat excessively in the near future.”

MT: Investors Urged to Take Heed:

"There is going to be a bottleneck in infrastructure в that's the business for tomorrow in Russia," said Jean Lemierre, head of the European Bank for Reconstruction and Development.

"The profits from oil and gas shouldn't be used only to import consumer goods, but to invest and produce," he said. "Russia needs to invest more and be more open."

With officials from Rosneft and Gazprom canceling appearances at the last minute, the tone of the conference tended to steer away from the country's lucrative oil and gas sector.

...

Rudloff praised President Vladimir Putin's strong hand, faulting journalists for presenting an unfairly harsh picture of the country. "Economic development is only possible in strict frame and order," he said, comparing contemporary Russia to post-World War II Europe.

"Let's move away from the consistent cheap criticism by many journalists who don't have the slightest idea what is going on in the country," he said.

In a question-and-answer session, a Dow Jones journalist accused Rudloff of failing to recognize various recent missteps in the country -- from the shutting off of gas through Belarus to the unsolved killings of journalists. His comment was met with loud applause from many of the 400 journalists in the audience. Rudloff's answer with an appeal to "be fair" was met by equally thunderous applause from Russian delegates and foreign investors in the hall.

The U.S. Ambassador to Germany, William Timkin, has chimed in on the Russia energy debate, providing the Germans with a gentle reminder that they are absolutely instrumental in playing a leading role in helping bring Russia around to an equitable and rule-based energy relationship with Europe.

That's a pity - despite how much sense Timkin makes, Germans will likely be motivated to do exactly the opposite of whatever the U.S. Ambassador recommends...

The IHT:

With Germany now holding the presidency of the European Union and the G-8 group of industrialized countries, Timkin said there was an opportunity for the countries involved to make some headway on energy security: "We have a shared interest in demonstrating that energy security is not just another slogan but a product of responsible partnership." That meant, he added, trying to "institutionalize Russia's state commitment to these goals."

Timkin suggested that Germany could play a special role in supporting "ever-greater Russian convergence with the goals of international institutions" because Berlin had a longstanding policy to develop a working relationship with Russia through a strategic partnership.

"That strategic partnership with Moscow, especially in the energy sector, affords the opportunity to engage in discussions about transparent and rational market structures," he said. He added that Russia's standoff with Ukraine in 2006 and Belarus this year, in which energy deliveries to both countries were halted over a price dispute that led to shortfalls in some European countries, showed the necessity and importance of transparency in energy markets.

"Under a worst-case scenario, oil and natural gas will be the currency through which energy-rich countries leverage their interests against import-dependent nations," Timkin warned. "We have seen examples of this in Iran and Venezuela. Some have concerns about Russia. By consultation and dialogue, Russia can allay those concerns."

Today I caught wind of news that the Hungarian Prime Minister, Ferenc Gyurcsany, will be making a visit very soon to visit "Il Professore" Romano Prodi in Italy.

Is Romano Prodi Afraid of Russia?

If only Gerhard Schroeder were invited, then we would truly have the complete "Axis of Cowardice" in full attendance. Naturally I am referring to the deliberate decision making by these three heads of state which have derailed European energy security, encouraged and benefitted from Russian energy imperialism, and have made an EU consensus on Russia policy nearly impossible.

The most recent Hungarian contribution is of course the endorsement of the Russia-favored Blue Stream pipeline, which is believed to have more or less buried the Nabucco project, which would have helped Europe diversify its suppliers. During my recent trip to Budapest, I heard a lot of very interesting rumors regarding possible shareholdings by government officials in MOL (the Hungarian partner of Gazprom in the project) and a possible major merger, which of course would cast this Blue Stream decision in a decidedly different light.

Will Europe really put up with another Gerhard Schroeder-style maneuver of using public office for massive private gain at the cost of the Union's security? Ferenc Gyurcsany opposition in Hungary, the Fidesz party, certainly seems alert to the threat, denouncing the PM's decision to turn Hungary into "Gazprom's most cheerful barracks."

By now you are probably aware that Boris Yeltsin, Russia's first post-Soviet president, passed away today. His legacy is complicated to say the least, and while at the moment I don't have anything of great value to add to this crowded debate, here is a round up of obituaries and reflections that various newspaper editors had stored in their top drawers.

BBC: Russian ex-president Yeltsin dies

Mr Gorbachev paid a mixed tribute to his successor, saying Mr Yeltsin was responsible for "many great deeds for the good of the country and serious mistakes", Russia's Interfax news agency reported.

Telegraph: Former Russian leader Boris Yeltsin dies

Mr Yeltsin was a contradictory figure, rising to popularity in the Communist era on pledges to fight corruption - but proving unable, or unwilling, to prevent the looting of state industry as it moved into private hands during his nine years as Russia’s first freely-elected president.

Times of London: Boris Yeltsin dies, aged 76

Yeltsin made a stunning debut as president. He introduced many basics of democracy, guaranteeing the rights to free speech, private property and multiparty elections, and opening the borders to trade and travel.

But he was at best an inconsistent reformer who never took much interest in the mundane tasks of day-to-day administration - preferring instead to sack his government and appoint a new one when things went wrong. In 1998-99, as the economy fell into a deep recession, he fired his entire government four times.

Chicago Tribune: Passing of a 'complex and enigmatic' democrat

Like Russia, Yeltsin was complex and enigmatic. Also like Russia, he professed democratic ideals but struggled to live up to them. He often chose conflict over compromise, and in his efforts to thwart his enemies and enhance his power he trampled over the rule of law and the will of his people.

AP: Flawed but fearless defender of democracy

TIME: Boris Yeltsin: The Man Atop the Tank

In the end, Yeltsin will be better remembered for that dramatic moment when he jumped on the tank to stop others from taking power through a coup rather than for what he achieved once in power himself.

Economist: Bye-bye Boris

All the same, Mr Yeltsin stood for three fundamental principles. He believed in freedom of speech, including freedom of the press, no matter what. He wanted Russia to be friends with the west. And he despised the Communist party and everything it stood for—particularly the KGB. It was a tragedy that he did not dissolve it fully in 1991, when he had the chance. It was an irony that the candidate his family chose as a safe successor, the cautious, little-known ex-KGB man, Mr Putin, should have done so much to reverse his legacy, blaming so many of Russia’s ills on what he calls the “chaos” of the 1990s.

Reuters: Russia’s Yeltsin known for gaffes, off-colour jokes

In 1989, Mr. Yeltsin had to account to the Supreme Soviet how he had ended up at a police post outside Moscow dripping wet and wearing only his underwear.

He said he had been attacked, his head covered in a sack and dumped off a bridge into a river. Top communists said he had been drunk while on his way to a tryst with a lover.

Once in office, with the Soviet Union replaced by 15 states, Mr. Yeltsin’s antics attracted world-wide television attention.

In 1992, he played the spoons, a popular musical instrument in Russia, on the head of Askar Akayev, the president of ex-Soviet Kyrgyzstan.

In 1994, Mr. Yeltsin shocked officials during a picnic on a boat steaming down the Volga by suddenly ordering his border guards to toss his spokesman Vyacheslav Kostikov into the cold river.

Officials marking the departure of the last Russian troops from Germany the same year looked on aghast as he stumbled after a champagne lunch, seized the baton from the leader of a military band and insisted on doing the conducting himself.

Later the same day, he grabbed a microphone at a reception and sang tunelessly.

In perhaps the most celebrated incident, Mr. Yeltsin failed to emerge from his plane for talks with Ireland’s prime minister during a stopover at Shannon airport in 1994, leaving his hosts stunned on the tarmac.

New York Times: Boris Yeltsin, Russia’s First Post-Soviet Leader, Is Dead

Mr. Yeltsin was a moody man, subject to occasional glooms and lassitudes, and wrote in his autobiography of being plagued with worry, of bending under the burdens he carried: “The debilitating bouts of depression, the grave second thoughts, the insomnia and headaches in the middle of the night, the tears and despair, the sadness at the appearance of Moscow and other Russian cities, the flood of criticism from the newspapers and television every day, the harassment campaign at the Congress sessions, the entire burden of the decisions made, the hurt from people close to me who did not support me at the last minute, who didn’t hold up, who deceived me - I have had to bear all of this.”

Washington Post: Former Russian Leader Boris Yeltsin, 76, Dies

"He created a new kind of power," said Vladislav Starkov, editor of the weekly newspaper Argumenty i Fakty. "He created a new economic situation. A new psychological situation. A new international policy. A new Russian mentality. Of course, there were many mistakes, stupidities. But today we live with and take for granted absolutely new political ideas and institutions . . . This is Yeltsin's legacy."

Guardian: How Yeltsin helped thaw the big freeze with Britain

Later the same day, Mr Yeltsin made a symbolic visit to the heart of capitalism, London's stock exchange. The next day, he enjoyed the rare honour of being invited to address a joint session of both houses of parliament. Lunching with the Queen at Buckingham Palace, he invited her to visit Russia. And in October 1994, the thaw in the relationship between Britain and Russia was completed when the Queen finally accepted the invitation.

The visit to Moscow put an end to more than seven decades of estrangement between the Kremlin and Europe's royalty over the murder in 1918 of Tsar Nicholas II and his wife and children, who were relatives of the British royal family. Becoming the first British monarch to set foot in Russia since 1908, the Queen, accompanied by the Duke of Edinburgh, received the warmest of welcomes from her host. Mr Yeltsin pulled out all the stops, treating his visitors to a glittering reception at the Kremlin and a visit to the Bolshoi ballet.

Russia's last minute decision to pull out its highest ranking representatives from the Russian Economic Forum in London this week isn't helping build any trust between the two countries.

FT: Russian revenge:

There is something very disturbing about the last-minute mass pull-out of Russian business leaders from London's Russian Economic Forum, which starts today.

Some called the organisers, complaining of late diary changes. Others did not bother with excuses - it was obvious that behind the boycott lay the dread hand of the Kremlin.

Officials have long been unhappy with London hosting the premier annual Russian economic conference and have steadily cut ministerial representation. But business people were free to come until last week when the top names suddenly cancelled.

The authorities gave no reasons. But they left no doubt they wanted to punish London, probably over the Boris Berezovsky affair. Officials are furious at the UK's failure to respond to the exiled oligarch's recent anti-Kremlin outburst. Moscow is also angry at the harm done to Russia's global image by the row over the poisoning in London of former spy Alexander Litvinenko.

The conference pull-out highlights the challenges of doing business with Russia. While the economy is booming, creating opportunities for many companies, the Kremlin is increasingly ready to intervene in the economy, even, it seems, in the conference sector.

...

For foreign investors these are rich but dangerous waters. Even large groups are not immune from arbitrary actions, as Royal Dutch Shell found when it was pressed to sell control of the Sakhalin-2 scheme to Gazprom. Even companies not involved in strategic sectors may be hurt in the cross-fire, as the forum organisers have learnt.

Investors who think they can avoid political risk are fooling themselves. In Russia almost everything is political and almost everything potentially carries political risk.

Who could blame them?

FT: Britons wary of Russian business culture:

British business people are very wary of their Russian counterparts and are worried about the growth of Russian investment in the UK, according to an opinion poll published yesterday.

The survey, which was released on the eve of the Russian Economic Forum, London's premier Russia-oriented conference, shows nearly half of those polled (49 per cent) think Russian investment in the UK is "a bad thing". Some 33 per cent believe Russian business culture is different from British and that Russian takeovers of UK companies could damage public trust in business.

By now most everybody who is a junkie for Russia news like me will have read, commented on, and formed an opinion over Andrew Kramer's article in today's New York Times on the new "50% Positive News Rule" at Russian News Service. Sean Guillory has even already blogged about it, arguing that it is the economic elites, not the Kremlin that is the driving force behind the rapidly withering independence of media outlets in Russia.

And then there was one ... Echo Moskvy, which is more than 60% owned by Gazprom, is one of the last radio stations where critical news coverage is tolerated

Here's an extract from Kramer's article:

“Russia is dropping off the list of countries that respect press freedoms,” said Boris Timoshenko, a spokesman for the foundation. “We have propaganda, not information.”

With this new campaign, seemingly aimed at tying up the loose ends before a parliamentary election in the fall that is being carefully stage-managed by the Kremlin, censorship rules in Russia have reached their most restrictive since the breakup of the Soviet Union, media watchdog groups say.

“This is not the U.S.S.R., when every print or broadcasting outlet was preliminarily censored,” Masha Lipman, a researcher at the Carnegie Moscow Center, said in a telephone interview.

Instead, the tactic has been to impose state ownership on media companies and replace editors with those who are supporters of Mr. Putin — or offer a generally more upbeat report on developments in Russia these days.

The new censorship rules are often passed in vaguely worded measures and decrees that are ostensibly intended to protect the public.

Late last year, for example, the prosecutor general and the interior minister appeared before Parliament to ask deputies to draft legislation banning the distribution on the Web of “extremist” content — a catch phrase, critics say, for information about opponents of Mr. Putin.

Given that Russia has had such an extremely brief period of actual media freedom, it is easy to understand why so many people distrust privately held media, and why they are led to believe that any coverage that is critical of the Kremlin is only taking that angle at the behest of someone's private interests. Sorry to be the one to point this out, but sometimes there are genuine news stories that the public deserves to know about that may not be politically convenient for the government. Sometimes there is more than "50% negative news" simply because that is what is happening in the nation. Let's not forget though the the original news story to truly inspire the state's attack on and subsequent takeover of NTV was the coverage of the atrociously executed government response to the Kursk disaster. As Peter Baker and Susan Glasser have written in Kremlin Rising, it was NTV's interviews with the sailors' widows that made the president "livid," and its exposure of the government's misinformation, refusal of international assistance, and botched and delayed rescue effort that inspired one of the more aggressive government clashes with media in recent times. Such coverage following a national tragedy is within the normal role of a responsible and free media - but in Russia it spelled the end of independent (not pro-government) television news.

It is particularly naive to think that the Kremlin's hands are clean in this crackdown on free speech. Because the beneficiary of this development is indisputable, I am not especially concerned with the debate over who exactly is behind the diminishing press freedom in Russia - all I see is the hard fact that it is more and more difficult for someone to criticize the government, more difficult to access information, and near impossible to have an open debate on policy. These are overwhelmingly negative trends. In recent years, I thought that we were being sent a clear message from the Kremlin - independent news coverage will be tolerated on a few radio stations, a handful of newspapers, and more or less widely tolerated on the internet. All that mattered to the siloviki was controlling television, because that's where the significant majority of Russians get their news. It sometimes seems that people don't understand that the Kremlin always plans for the existence of a visible opposition, always in tightly controlled spaces to function as pressure-release valve, so they can point to it as a defense to anyone from the outside who dares to describe Russia as a totalitarian state (they discovered that all you need is a "majoritarian" control of media and society). But as we seeing with this development, as well as the recent indications of a coming crackdown on the internet, the public space alloted for opposition and government critics is undergoing a tightening.

What does this tell us about the perceptions at the highest levels of Federation leadership? Do the recent moves on the media, as well as the smothering of the Other Russia protests in the wake of heightened rhetoric and hyperbole spiraling out since the Munich speech exude confidence and a brazen willingness exercise political muscle? Or do these actions betray nervousness and instability as everyone places their bets on how the post-Putin period will shape up? I'm inclined to believe the latter.

When Mikhail Khodorkovsky was mounting a serious campaign in a by-election for a seat in the Russian State Duma in the summer of 2005, the Kremlin sought to turn his campaign into a ridiculous farce by suddenly announcing the candidacies of several other prisoners - low-life career pickpockets, multiple murderers, and the like.

It looks like the Kremlin is up to its old tricks again in 2007. In an obvious attempt to ridicule and discredit the recent Marches of Those Who Disagree, which were so brutally suppressed by the authorities, we now have the following story, as reported this weekend by the official Russian news agency, RIA Novosti (we have translated the story to English).

Say what you will about the Kremlin's well-oiled machinery of propaganda, but nobody could argue that they don't have a certain dark sense of humor.

Blondes of Nizhny Novgorod come out in defense of their rights

NIZHNY NOVGOROD, 21 Apr - RIA Novosti-Privolzhie, Andrey Rukavishnikov.

Participants in a youth action in Nizhny Novgorod attempted to change the negative attitude that has developed in society towards blondes. Taking part in a "March of the Blondes Who Disagree" on Saturday, that was sanctioned by the city authorities, were not only girls with light hair, but also brunettes in solidarity with them, as well as youths of their acquaintance.

"We consider that jokes on the subject of dumb blondes discredit many women and infringe on their rights. Blondes have the same rights as other people, and hair color does not yet give the right to abuse. Therefore the blondes of Nizhny Novgorod have decided to unite and declare their decisive protest and disagreement towards the existing system of values, which has developed in contemporary society", declared the head of the event's organizational committee, Anna Zaitseva, to journalists.

In her words, the participants in the action want to defend themselves from any humiliations and to defend their rights, as well as to prove that hair color does not reflect on intellectual abilities. Zaitseva underscored that the organizers do not have anything to do with the inspirers of and participants in the so-called "marches of those who disagree" that have taken place in a series of Russian cities, including in Nizhny Novgorod.

Before the start of the march, the activists unfurled large white sheets of paper with pink lettering: "Blondes - bright heads!", "A blonde - this is not a mark, but a distinction!", "Light hair - this is a reward!", "Don't believe it Sobchak - we're not like that!", "We won't let blondes be insulted!"

The organizers had counted on 200 persons taking part in the action, but there turned out to be nearly ten times fewer of them. Having gathered at the "Oktyabrskaya" hotel, the march participants, surrounded by more than 20 journalists and under the watchful eye of ten policemen, went along the Upper Volga Embankment. They chanted slogans glorifying the mind of blondes through loudspeakers.

The final point of the procession became a platform at the monument to Kozma Minin on the central city square that bears his name. There the girls took part in a farcical quiz show, called upon to demonstrate the erudition of blondes.

"We will prove that we are no worse than all the rest!", declared the head of the organizational committee, adding that the light color of her hair is not real, but that in her soul she is - a true blonde.

From the Observer's comment section, "Russia's great leap backwards," by Oksana Chelysheva.

And why have I joined the marches? Because I am furious with the arrogance of the Kremlin, who consider themselves masters of our flesh and fate. I don't want to feel the eyes of the police following me all the time. I want to be able to move around my city and country freely. I don't want my telephone to be tapped. I don't want my friends to be killed. I don't want to receive any more death threats that remain uninvestigated.

I want my daughter to live in the Russia that I love and admire. That's the Russia of great culture and beautiful nature. It is not Putin's Russia that has alienated the countries of the free world, while cherishing allies from Hamas, Syria and North Korea. I feel furious with the Kremlin's arrogant certainty that we are just a herd who need to have a shepherd. I have participated in the marches to feel and become free.

The Financial Times is having a big day on Russia.

Runners approach the starting blocks

“As soon as Mr Putin says candidate X or Y should be president, he becomes a lame duck, because the whole Russian elite will immediately orientate themselves around that person,” says Alexei Makarkin of Moscow’s Centre for Political Technologies.

“Mr Putin’s favourite style is to make it impossible for any expert to foresee his decision before it is announced,” says Nikolai Petrov of the Moscow Carnegie Centre, adding that a third name could well emerge.
...
One intriguing possibility is that Mr Putin might let two officially-endorsed candidates battle it out in the election. That could parallel the party rivalry between the pro-Putin, centre-right United Russia party, which dominates the Duma, and the recently-created centre-left – but also pro-Putin – Just Russia party.

Political scuttlebutt in Moscow suggests the emergence of a second pro-presidential party may not simply be, as critics say, an attempt to create fake political competition. Rather, the two parties may be loosely tied to the two Kremlin clans.

The state’s unsated appetite

The kowtowing has underlined the new subservience of foreign oil majors seeking a place in Vladimir Putin’s new energy order, which for many industry observers began with the smashing of Mikhail Khodorkovsky’s Yukos oil company over back tax claims.

The humility has taken such a hold that when Gazprom took over Royal Dutch-Shell’s Sakahlin-2 oil and gas venture last November after a crushing government campaign, Jeroen van der Veer, Shell’s chief executive, enthusiastically thanked Mr Putin for his support.

Toughened Russia limbers up

The Kremlin generally keeps the more radical hawks at bay. It knows that, despite Russia’s recent economic recovery, it is still too weak to compete all-out politically, let alone militarily, with the US. Russia’s defence budget is only about 5 per cent of the US’s and most of its weapons date back to Soviet times. Fyodor Lukyanov, a liberal foreign policy analyst, says: “Putin definitely does not want a general confrontation with the west.”

However, with the presidential election looming, Kremlin officials may need to respond to increasing nationalism. Konstantin Kosachev, Mr Margelov’s counterpart in the Duma, parliament’s lower house, said in a recent FT article: “Russian politicians’ room for manoeuvre will be limited. Most Russians are disappointed by what is happening in their region and the explanation most commonly heard is that Russia is too soft. Any politician who is not tough risks losing support.”

Diversification is elusive key to success

But it will be a long hard slog. First, following the price increases of the early part of the decade, the share of oil and gas has risen to around 25 per cent of GDP and 65 per cent of exports. While the Russian economy is far stronger than when Mr Putin took power in 2000, it is also even more reliant on hydrocarbon production.

Second, the strength of oil and gas exports puts upward pressure on the rouble, hurting the competitiveness of other sectors and threatening Russia with so-called “Dutch disease”.

Oil and gas revenues flowing through the economy are driving up prices, including wages. The authorities have worked hard to reduce inflation over the past decade but it still stood at 9 per cent at the end of 2006.

Igor Yurgens: Approach that is globally acceptable but better suited to home

Some actions by the Russian state have damaged the country’s image – sometimes unnecessarily. The Yukos case was a tragedy which could have been tackled differently. But in the cases of Gazprom’s treatment of Ukraine and Belarus, or Royal Dutch-Shell and the Sakhalin-2 project, sometimes I think there is a cultural gap between Russia and the west. In the substance of most of those conflicts, I would say the Russians were right. But the way things were explained to the outside world was clumsy, and the behaviour sometimes appeared uncivilised. Gazprom is now hiring public relations experts, which shows they understand things need to be rectified.

Russian companies undoubtedly have a reputational problem. Inside the country, the population still questions the legitimacy of some acquisitions of huge wealth, concentrated in some big groups. So why should public opinion in the west not also question that?

Muscovites move to trendy suburbs

Another factor driving the out-of-town housing boom is that for the first time banks are offering Russians mortgages on affordable terms.

Outstanding mortgages make up 1 per cent of Russia’s gross domestic product, compared with 30 per cent in Europe, says Mr Nash. But the Russian figure is increasing by 150 per cent each year. “It’s growing phenomenally quickly,” he says.

Availability of mortgages will have an impact on the economy far beyond housing because it gives Russians a mechanism for enlarging their wealth.

“Once you can get access to mortgage markets you can obviously borrow on your increased wealth and . . . you bring forward future income streams by doing that in a country where it has been impossible to do that in the past, realistically,” says Mr Nash. “You have access to funds at last.”

REGIONAL PROFILE: SOCHI

Greenpeace and other environmental groups protest that the economic benefits will favour big companies such as Gazprom at the expense of smaller businesses. Not so, say Sochi city officials. They estimate that half the future tax revenues from Krasnaya Polyana will come from small and medium-sized companies, including hotels and restaurants. Mr Nadiradze insists that he is not building a resort just for Russia’s wealthy elites, but for everybody. “We are planning for all levels of the population.”

The Russian press review on the International Herald Tribune website has a blurb from a Kommersant article on Karinna Moskalenko:

KHODORKOVSKY'S LAWYER UNDER FIRE: Moscow's Council of Lawyers has opened disciplinary proceedings against a lawyer for Mikhail Khodorkovsky, the jailed former Yukos head, on charges that she left her client without defense. The Prosecutor General's Office and Russia's registration agency have called for Karina Moskalenko to be disbarred, though spokesmen from the agencies would not say why. Ms. Moskalenko said that when she was informed of the charge, she thought it was a "foolish joke."

I have just been notified that the highly regarded Russian human rights lawyer Karinna Moskalenko is being summonsed to appear before the Moscow Bar with respect to disbarment hearings.

Here is another installment of the NBC Nightly News series on "Putin's Russia: Riches, Rights, & Risks." This time the news segment covers energy politics.

Yulia Tymoshenko has published a long article in the new edition of Foreign Affairs titled "Containing Russia." The article contains a wealth of information and numerous compelling arguments, so we will probably go about cherry-picking interesting excerpts over the next few days. Apparently the article was ruffling some feathers in the Kremlin even before the journal hit the newsstands.

There is another problem facing Gazprom: the actual engineering costs of developing new gas fields in Russia. In the Shtokman gas field and on the Yamal Peninsula, in particular, the engineering costs, including the cost of transporting the output to Europe, are twice as high as for new gas fields in North Africa and the Middle East. The international gas market is already beginning to recognize this, and, over the long term, it could be enormously dangerous for Russia. Indeed, Russia may actually be putting itself out of the gas business, because high engineering costs for new projects in Russia are signaling to the market that Russia and Gazprom lack the capacity to develop these fields. Western companies could come in and do the job, but given the Kremlin's recent usurpation of Shell's investments on Sakhalin Island, these companies would be remiss in their fiduciary duties if they undertook such investments.

The only way to avoid a crisis is to break Gazprom's monopoly on pipeline infrastructure and to license independent gas producers. Independent producers already account for 20 percent of domestic gas sales in Russia and are boosting their output. Further gains would require market-based incentives. Europe can help by explicitly linking its acceptance of Russia's WTO membership to Russia's ratification of the Energy Charter and its attendant Transit Protocol, which would guarantee access to Russian pipelines for Gazprom's competitors.

Any worthwhile energy security policy for Europe would also seek to loosen Gazprom's monopolistic grip on the pipelines. European competition policy, which has successfully brought companies as big as Microsoft into line, could -- if used skillfully -- also help turn Gazprom into a normal competitor. Establishing an independent regulator, as Russian Economy Minister German Gref has suggested, would also be an important step toward splitting Gazprom into a pipeline operator and a production company. But Putin has vehemently rejected such a move. Thus, he now faces a choice between domestic gas shortages that threaten to slow economic growth and losing the Kremlin's "national energy champion."

Beyond tackling Gazprom's monopolistic power, a realistic energy policy for Europe would also seek to share the risks of any possible energy blockade equally among all Europeans, rather than allowing separate deals that leave others vulnerable to energy blackmail. Such a policy would need to incorporate a consensus that no country could reach a deal with Gazprom that undercuts EU plans to help construct pipelines from Central Asia that bypass Russia. Another counterweight could be built through trade. By extending the single market eastward to include Ukraine, the EU would shift the center of gravity for the region's trade relations. Today's negotiations over a "deep free trade agreement" between Ukraine and the EU need to lead, eventually, to an agreement that will give Ukraine candidate status for EU membership.
....
The real test of statesmanship is the ability to protect one's country against unfavorable and unforeseen contingencies. The fatal flaw in Russia's current oil- and gas-powered assertiveness is that the leaders in the Kremlin have lost their sense of proportion. Today's budget surpluses have allowed them to overestimate the extent of Russia's economic renewal, and they seem to have forgotten that by bullying their immediate neighbors they are also sending shock waves across the entire West. Of course, the Kremlin leadership will find it hard to admit that the centralized system that it is re-creating lacks the capacity to spur initiative, that Russia, despite its vast natural resources, remains a very backward country. The subservience that the Kremlin demands is stifling the vitality and creativity that Russia needs if it is to grow for the long term, let alone sustain its place in the world.

From Canada's Financial Post, an article on the political importance of Russia's impossible energy project proposals (and a quote from RA):

Russia's Tunnel Vision

Jon Harding and Claudia Cattaneo, Financial Post

CALGARY - Russia yesterday revived a plan to transport oil, natural gas and electricity to the United States via a tunnel under the Bering Strait from Siberia to Alaska, a colossal project that was quickly panned for its questionable economics and business logic and its impact on U.S. energy security.

The proposal, which would include a rail system ending at tiny Fort Nelson, B.C., would also threaten Canada's unique energy relationship with the United States, energy experts and economists said.

"It's in the realm of George W. Bush's comment, 'Let's send someone to Mars', " said energy commentator Michael Lynch, president of Amherst, Mass.- based Strategic Energy & Economic Research Inc.

"It's a nice idea, but after they look at the costs and the benefits, it's going to be a long time in the future," Mr. Lynch said.

Yesterday morning in Moscow, Viktor Razbegin, deputy head of industrial research at the Russian Economy Ministry, told reporters that state organizations in partnership with private companies would build and manage the energy corridor, known as TKM-World Link.

The 6,000-kilometre corridor from Siberia into the United States includes a 100-kilometre tunnel under the Bering Strait. It will be more than twice as long as the underwater section of the Channel Tunnel between the U.K. and France. The undersea tunnel would contain a highspeed railway, highway and pipelines, as well as power and fiberoptic cables.
...
Greg Stringham, vice-president of the Canadian Association of Petroleum Producers, said similar plans have been floated by the Russians in the past, but went nowhere.

The first came as far back as 1905, when Tsar Nicholas II, Russia's last emperor, approved a plan for a tunnel under the Bering Strait, 38 years after his grandfather sold Alaska to the United States for US$7.2-million. The First World War ended the project.

Mr. Strigham said the latest ruminations about an oil pipeline were made as recently as six years ago. "I know it has been extremely difficult to justify it economically in the past," he said.
...
Canadian lawyer Robert Amsterdam, who defended jailed Russian oil tycoon Mikhail Khodorkovsky, said Russia is notorious for floating big plans to curry favour from foreign governments and companies but that go nowhere.

"God forbid our politicians take it seriously," Mr. Amsterdam said. "When I keep telling people that Russia uses energy as a weapon, these mega-project prognostications, now I can say quite frankly, 'Follow the Shtokman theme.' They lead countries by the nose; countries literally change their foreign policy so as not to confront the Russians based on these carrots, and then end up more often than not with nothing."

Complete article here.

What do you do when an aggressive goliath-like state company takes a keen interest in one of your largest foreign investments in the world, and uses the thin legality of the environmental agency to put you under the gun? As they muscle you up against the wall to whisper a clear threat: "give up majority control of this project and make it look legal, or lose everything in what would be seen as large scale investment-jacking," what would be your response?

For Royal Dutch Shell, the difficult answer was the former, and today they are going about putting on the good face as they pass over the lunch money to the big bully Gazprom - a $7.5 billion majority stake of the Sakhalin-2 oil and gas project. Of course there is an argument that Shell is just looking out for the short term interests of its shareholders, and hoping to put a tourniquet on this financial wound, but in the long term, these gestures of surrender to Russia playing quasi-legal hardball only embolden these hostile tactics against foreign investors. Need proof? Look no further than the environmental watchdog (or attack dog, if you prefer) Oleg Mitvol, who is already busy putting the squeeze on Imperial Energy's license in Siberia, causing a 17% dip in the share value.

If using regulatory authorities to carry out the orders of state energy companies was accepted by Shell, why won't the international financial community accept it again? You almost can't blame them for sticking with what works.

The Sakhalin fiasco is a prime example of how corporate Kremlin sees its role in global capitalism - it is not the acceptance of markets, but rather the distortion-producing intervention in markets to funnel benefits toward state-owned firms that is the norm (see Yulia Tymoshenko's recent piece on competition). Any mention of these anti-competitive type moves, and Gazprom and Kremlin officials (unfortunately there is little difference) strike a defensive pose. Presidential favorite Sergei Ivanov told the Financial Times yesterday "There is no energy imperialism. Oil and gas have a price. In the mid-1990s you taught us how to be a . . . market economy. We learnt our lesson. Now we hear criticism that ‘you are acting wrongly – you are using energy prices for political aims’. [But] we’re selling to everyone according to market prices.”

And in regards to the Sakhalin heist, Alexander Medvedev of Gazprom echoed the pro-market illusion in a recent interview with Time Magazine:

The state doubted the capital expenses they claimed. Also, the consortium failed to meet its ecological safety commitments. The state couldn't ignore that. Personally, I didn't spare time to look into this issue, because I come from Sakhalin. We resumed talks, only once the issues of expenses' compensation and ecological damage had been settled. The state lifted ecological restrictions on the project, once Gazprom stepped in, because we submitted a plan to clear up the damage and make sure that nothing of the kind happens again.

One would think that Shell would be bitter about this transaction, but actually, quite the opposite is true: the company is one of the key sponsors for the 10th Annual Russian Economic Forum to be held in London 22-24 of April, which will feature the top brass from Gazprom and the Russian government, as well as other companies such as ENI and Enel who have been so helpful in helping launder the titles of stolen Yukos assets.

It must be a truly surreal experience for these executives to talk enthusiastically and optimistically about investment in Russian energy.

Today I just completed a short visit to the beautiful city of Tallinn, where I had the great honor of personally meeting with President Toomas Hendrik Ilves, among many other interesting people. I had a serious discussion with President Ilves on various issues, and I can say that he lived up to his reputation as a erudite intellectual, even speaking better English than I do.

Aside from these meetings, I was visiting Estonia to give a speech at Tartu University, where I had taught part of a class last summer. My talk covered the issue of the North European Gas Pipeline, which again has seized the headlines here as environmental concerns raised by Finland may be pushing the planned pipeline into Estonian waters (Hello Estonia has blogged about this).

Having just come from Latvia the day before, I found a significant contrast between the two Baltic nations. In my limited subjective experience, there was a far greater amount of optimism in Estonia, and Tallinn exhibited a distinct Nordic feel as opposed to Riga's "Mitteleuropa" elegance. In terms of these countries' relations with Russia, they are moving in opposite directions.

Just like Latvia, Estonia had eagerly hoped for a warming of relations with the Russian Federation following its entrance into the EU and NATO, but this did not occur. Estonia also shares Latvia's disappointment with the results they have been able to achieve from membership in these organizations.

However, unlike Latvia's main areas of difficulties with Russia, Estonia's public is mostly occupied with the tricky cultural politics of identity, which have been most eloquently illustrated by the fight over the so-called Bronze Soldier - which some say is an honor to those who served in the Great Patriotic War, while others call it a symbol of the tyranny from the Soviet presence. While Latvia debates its border with Russia (recently settled) in terms of the pre-War voluntary alliance vs. occupation, Estonia is faced with the difficult task of negotiating how to understand the national identity in the wake of WWII. (However, there are a host of other political issues behind this fight).

I don't have anything really insightful to add to this emotional debate beyond the observation that historical reckoning is pastime best practiced with great patience and open minds. (here's what I wrote about the Bronze Soldier)

Another extremely important difference in Estonia's relationship with Russia is its relative energy independence thanks to oil shale. Despite this self-sufficiency, I am told they are actually being pressured by the EU to import Russian gas. Go figure!

Not being as politically dependent on Russia as some other neighbors, Estonia can afford to be more honest about some topics. For example, while most of the attention at the last Munich security conference was focused on Vladimir Putin's speech, President Ilves gave a very compelling and intelligent talk on prosperity, peace, and security, and recognized the need for the European Union to develop a common energy policy: "We recognize that it would be good to have a common energy policy, that instead of individual deals with energy suppliers, the EU speaks with a common voice. This would allow us to meet our energy needs more cheaply, we would avoid the divide et impera tactics available to suppliers, it would add security to energy supply when dealing with a fickle Russia that sees energy as a foreign policy tool."

During my visit to Tallinn, I did not make very many friends when I spoke out about the surprising silence of European political leadership in respect to the Russian Federation's attack on the market. I tried to explain how contagious Gerhard Schroeder's technique of using the Russia-as-victim narrative to block any criticism of his personal, corrupt enrichment and collusion with the Kremlin is becoming among others looking to explain away the problems in Russia. However, being in Estonia was I extremely mindful of the political sensitivities surrounding this issue of a German leader calling Russia a victim. Taking a lesson from the Bronze Soldier controversy, I was explicitly clear in my comments with the press regarding the tremendous and brave sacrifice of Russians during the last war, and that Schroeder's use of this narrative device in no way should ever be confused with the reality of Russia's extraordinary human contribution during the last war.

Dutch blogger Olaf Koens has kindly pointed us toward an amusing Moscow Times op/ed titled "The Jean-Claude Van Damme Trade Theory":

The Jean-Claude Van Damme Trade Theory By Max Delany Staff Writer

The secret to flourishing relations between Russia and Italy might just be explained in the form of a B movie star: Jean-Claude Van Damme.

The actor appears to be a favorite of both President Vladimir Putin and his old pal Silvio Berlusconi, the former Italian prime minister. Van Damme sat beside Putin, a judo expert, during a martial arts contest in St. Petersburg on Sunday, and he got a big hug from Berlusconi afterward during a cocktail party at Konstantin Palace.

Wait, you say. So what might the Muscles from Brussels represent between Russia and Italy? Simple. His movies are loved in both countries and, some businessmen suggest, he epitomizes similarities shared by Russians and Italians.

"In his films, he is close to both the Russian and Italian mentalities," said Vittorio Torrembini, vice president of Gim Unimpresa, an organization representing Italian businessmen in Russia.

Like Van Damme's characters, "neither Italians nor Russians like very strict laws. In Russia you can usually find some way around it, the same as in Italy," Torrembini said.

"I've lived for almost 18 years in Russia, and I've come to the conclusion that firstly the Italian way of life is similar to Russia's."

He is echoed by Mikhail Asiryan, head of Ameria, a company that has imported Italian pasta since the early 1990s. "Italians seem to feel very comfortable in Russia. Even despite the cold," he said.

Commonalities appear to be playing a major role in a revival of trade ties that stretch back to Soviet times. The friendship between Putin and Berlusconi is key, businessmen say, as is the fact that there is a lot of money to be made on both sides.

Putin visited Italy in March, and a flurry of business activity has broken out in the weeks since. A consortium of Italian giants Eni and Enel became the first foreign company to scoop up former Yukos assets at a recent auction, and Aeroflot has mounted a bid for Italy's Alitalia airline. More than 30 Italian companies, meanwhile, are setting up factories around the country, focusing on transportation, the defense industry and even ceramic cookers, Torrembini said.

"There were never such relations before as there are now. It is really a very positive moment in the relationship between the Italian and the Russian economies," Torrembini said.

Economic Development and Trade Minister German Gref will leave Friday for a trip to Italy. His Italian counterpart, Emma Bonino, made her first visit to Moscow last week.

Bonino praised the "very intense relationship of commercial and cultural exchange" between Russia and Italy after her talks with Gref, whom she called a "very pragmatic man." She also said Gref had underscored the importance of Russian companies expanding and investing into key Italian industries apart from oil and gas.

Umberto Vattoni, president of the Italian Trade Commission, said Gref's remarks showed Italy was now in a "position of pre-eminence."

Figures bear out the upbeat assessment, with a surge of nearly 20 percent in bilateral trade last year that took the total to more than $20 billion for 2006. That puts Italy in third place among European countries, behind Germany and the Netherlands, according to the Italian Trade Commission.

Moreover, Russia became the top destination for Italian exports outside the European Union last year, while Russia shipped $13.6 billion in goods to Italy.

"In brief, Italy exports finished products and imports raw materials," said Fabrizio Camastra, deputy director of the Italian Trade Commission. He named machinery, textiles and furniture as the major sectors of Italian exports.

Despite changes in Italian leadership after elections last year, the current boom is widely credited to Berlusconi's influence.

"Anything of this strategic magnitude would have been in the pipeline for a long time and would have been germinated during Berlusconi's period in power," said Roland Nash, head of research at Renaissance Capital.

Putin and Berlusconi have vacationed together, and Berlusconi has long defended Putin's policies, even as the leaders of other EU countries worried about growing authoritarianism in Russia.

"Berlusconi seemed more willing to turn a blind eye or play realpolitik than just about anyone else in Europe," Nash said.

"Berlusconi clearly has a lot of remaining influence, both political and in business," he added.

Italian Prime Minister Romano Prodi appears less willing to ignore reservations about Russian policies.

Torrembini, of Gim Unimpresa, said economics trumped Putin and Berlusconi's friendship. "I know that they had a close personal relationship, but the good relationship has continued under Prodi," he said. "The personal relationship has some influence but not as great as the economics."

Beyond the complexities of politics and billion-dollar deals, businessmen on the ground are concentrating on making money. A three-week "Made in Italy" exhibition opened last Wednesday at the GUM department store, showcasing scooters, Alfa Romeo cars and Ariston fridges.

"The partnership between Russian and Italian business is growing and getting stronger. The Italians have been quick to adapt to the peculiarities of Russia," said Asiryan.

"The people understand one another, and there are certain characteristics that unite them," Torrembini said.

Some highlights from Sergei Ivanov's big interview in the FT:

He believes Russians do not want a fully “Anglo-Saxon” style of government. Neither does Russia want a new cold war, though it feels betrayed by the west’s behaviour since the last one. Above all, he says, anyone standing in the election on a ticket of repudiating Putinism will fail. ...

His western experience also sets him apart from many peers. “I see myself as a fairly liberal person, mainly because I spent a large part of my life living in European cities,” he says. Life abroad made him respect democracy; he likes Churchill, quoting his maxim that “democracy is the worst form of government, except for all the others”. Yet different customs and mentality mean Russians want something other than a copy of western-style democracy.

“Russia is a huge country and, mentally, unfortunately the majority of the population still relies on the tsar,” he says. “Russia will never take its model of management 100 per cent from the Anglo-Saxon political elite. Whether you like it or not is a different question, but I’m telling you how it is.”

Russia will be a democracy, he says, but should be allowed to find its own particular form as others have done. “How many years has the Liberal Democratic party of Japan been in power? Sixty years, without change. [He overlooks the LDP’s brief period in opposition in 1993-94.] Is anyone going to say there is no democracy in Japan?”

Or take America. “In the US, there is democracy,” he continues. “But in the US is it possible that a minority of the people can elect the president? Yes. What would you say if this happened in Russia? You would vilify us,” says Mr Ivanov, his lips tightening.

As for western-backed “beacons of democracy” around Russia’s borders – Iraq, Georgia, or Ukraine, where parliament is engaged in a stand-off with the winner in the 2004 revolution – the tightened lips become almost a sneer. Ukraine “completely undermines democracy. Because people, having seen this total mess, will say, ‘We don’t need your democracy. Appoint us a tsar, give us our wages and stop bothering us with your democracy’ ”.

President Vladimir Putin, a well known Judo master, spent last Saturday, April 14 at the International Mixed Martial Arts Tournament in St. Petersburg, where he made the attached speech along with Belgian actor Jean-Claude Van Damme.

From Kremlin.ru:

PRESIDENT VLADIMIR PUTIN: Dear friends,

Let me wish you a warm welcome. First of all, I would like to thank the organisers, the sportsmen and their trainers for coming to Russia. It is a great honour for us to receive the best fighters here in Russia, in St Petersburg.

I am not going to speak now about who achieved victory and who was defeated on this occasion. You are all outstanding sportspeople and you have done us a great honour and brought Russian fans much joy by coming here. We thank you for this and will always be pleased to see you here. I want to tell you that you have many friends here in Russia.

Yours is a particularly tough sport, but it has its own kind of nobility and respect for one’s opponent. This is a sport for men and women of courage. I congratulate you on today’s event and wish you future success.

JEAN-CLAUDE VAN DAMME (translated back from Russian): What a fine speech! What is there for me to add now?

VLADIMIR PUTIN: Plenty, I’m sure. You are known and loved by millions. Your performances have captured the attention of many young people, and this is very important. Practically all the characters you have portrayed are examples of brave and decent people.

JEAN-CLAUDE VAN DAMME: First of all, I am happy to be here. And to have been invited here by the President of Russia is a great honour.

Politicians know how to make speeches, of course, but listening to President Putin speak, I felt that this was not just another speech by a politician but words that came from the heart, because this is someone who knows sport, who has practiced sport and continues to do so.

The people gathered here today, the fighters, men and women, are indeed brave and noble people. It is also wonderful to see that our sponsors and friends are helping to develop this sport.

Anyway, I would like to express my sincere respect for you. Thank you.

From a long feature entitled "Failure of Democracy" in tomorrow's Guardian Weekly about the purge of Sergei Gulyaev and Yabloko from the St. Petersburg ballot. At the end of the article, Gulyaev puts forth what is undeniably a reasonable and legitimate grievance: "We don't want a revolution. We merely want free political debate in the media and the guarantee of participation in the elections."

The ruling follows numerous changes by the Kremlin to the electoral system. Putin has abolished elections for provincial governors - he now appoints them. He also imposed Moscow's control over local budgets. Under the latest rules of the game, political parties must have 50,000 members and be represented in half of Russia's provinces.

The old mixed constituency and list system has been replaced by a list-only system, making it impossible for popular independent local candidates to stand again as MPs. The hurdle for parties to win seats in the duma has gone up from 5% to 7% of the overall national vote. With fewer Russians voting, the minimum 25% turnout rule has disappeared. Moreover the Kremlin has invented a social democrat-style "opposition" party called A Just Russia, which competes for votes against Putin's ruling United Russia party. But both parties patriotically support the president, while maintaining the illusion of democratic rivalry. A Just Russia also takes away votes from the communists and nationalists. Kremlin political theorists describe this form of politics as "managed democracy".

The effect of these changes will be to kill off the country's few genuinely independent political actors, critics suggest. Even before anyone has gone to the polls, the shape of the next duma is widely known. It will be made up of four parties: United Russia, A Just Russia, the ultra-nationalists and the communists.

"Either you are part of the game or part of the pseudo-opposition, where you co-operate with the Kremlin guys and never touch Putin - or you can't participate in politics," Ryzhkov said. His assessment of Putin's Russia is bleak: "Almost all the results of perestroika and democratisation have been killed."

...

Nobody believes that St Petersburg, the scene of uprisings in 1905 and 1917, is on the brink of another one. "We don't want a revolution," Gulyaev says. "We merely want free political debate in the media and the guarantee of participation in the elections. These are fundamental things."

The Financial Times is reporting that opposition leader Garry Kasparov will be brought in for questioning by the FSB for the potential charge of "inciting extremism."

A statement from Other Russia said Mr Kasparov had been summoned in connection with an interview he gave to Ekho Moskvy - a radio station known for its independence - on suspicion that he had violated laws against public incitement to extremist activity. Statements made in a newspaper published by his political group, United Civil Front, were being investigated for similar reasons.

The coalition said Mr Kasparov would comply with the summons.

Human rights groups had warned that toughened anti-extremism laws passed last year could be used against legitimate political groups. Mr Kasparov's United Civil Front offices were raided by police looking for extremist material last December, though no action followed.

Alvaro Vargas Llosa published this fascinating column comparing Russia and Latin America in the Washington Post today (although the only place I could find it was on the Wall Street Journal site). In his view, given certain historical similarities, the appeal of populist rhetoric in both Russia and Latin America is not going to disappear overnight. In the past, this blog has compared the rise of United Russia and the legacy of the PRI of Mexico, and covered Russia's newfound fondness for closer relations with Latin America.

Alvaro Vargas Llosa

The Populist Republic

By ALVARO VARGAS LLOSA

April 18, 2007

I am fascinated by the similarities between Russia and Latin America. The latest wave of repression against critics of President Vladimir Putin and the victory obtained by Ecuadorian President Rafael Correa in last Sunday's referendum, which provides a green light toward setting up a constituent assembly that will give him authoritarian powers, remind us that despotic populism is alive and kicking.

Last weekend's detentions in Moscow and St. Petersburg of members of the "Other Russia," an opposition organization that includes former chess champion Garry Kasparov as one of its leaders, are a reminder that Russia is a ruthless autocracy.

With the exception of Venezuela, the authoritarian institutions operating under democratically elected governments in Latin America are not as bad as Russia's. Power is more decentralized in Latin America, where governments have not been able or willing to wrest back economic influence from the private interests that surfaced during the market reforms of the 1990s. Mexico was also dominated by a party-state for much of the 20th century and underwent a process of reform in the 1990s. Despite its many flaws, reform improved the political and economic environment. In Russia, liberal democracy never quite surfaced. Mr. Putin reacted against the oligarchy of the 1990s by establishing his own oligarchy. By contrast, although there was much crony capitalism, Mexico's system is freer.

With the return of populism to various parts of Latin America, a number of countries are headed in the direction of Russia. The formula usually combines a democratic origin, the dismantling of republican institutions from within and reliance on natural resources that are in high demand in the international markets. Last Sunday, Ecuadorians voted in large numbers to essentially rewrite the constitution. In this, Mr. Correa, who wants to replace democracy with an authoritarian regime, is following the example of his friend Hugo Chavez and of Bolivia's Evo Morales. And if Mexico's and Peru's current governments do not deliver economic improvement, we could easily see populists taking over the reins of power there too.

Russia and Latin America are the products of histories dominated by the absence of civil rights and property rights. In Russia, the absence of a liberal tradition doomed the transition to liberal democracy in the 1990s. In Latin America, the republics of the 19th century preserved the oligarchic structure of the colony. In the 20th century, they mostly experimented with populist democracy and military dictatorship.

Recent developments prove that the populist republic is not a thing of the past in Latin America. And the populist republic -- the combination of democratic appearances and autocratic controls, sustained by the sale of oil and minerals -- has much in common with Mr. Putin's Russia.

Today the Independent published an interview with Matthew Bryza, deputy Assistant Secretary of State for European and Eurasian Affairs of the US State Department. Bryza took the opportunity to lay down some of the most aggressive criticism in recent memory of Gazprom's anti-competitive ambitions in Europe, and revealed urgent US concerns regarding Turkmenistan gas. Bryza even compares Gazprom's activities to the game of Monopoly:

Excerpts:

"Gazprom is by law a monopoly," said Mr Bryza "and monopolies operate according to a hunger to acquire as much infrastructure as possible. There is a board game that American kids grew up playing - maybe you do in Europe as well - called Monopoly. How do you win? You buy up as much property as you possibly can. That's how you win the game. Monopolies do not contribute to economic efficiency, in fact they undermine economic efficiency."

Mr Bryza said it is "crucial that Gazprom now demonstrates its reliability in the long term as a supplier by virtue of investing in its domestic production and its pipeline capacity". He acknowledged that European governments cannot bar investment from firms on the basis that they are Russian-owned, but predicted the competition authorities will eventually curb Gazprom's activities.

Mr Bryza said: "At some point, European competition law will kick in and begin to question whether or not these are non-competitive practices." He also called for improved contact with Turkmenistan, saying: "Governments can reach out to the new Turkmenistan government. We are just trying to cultivate a new relationship with Turkmenistan, we feel we have the chance to open up an absolutely new chapter in our engagement with Turkmenistan.

"My colleagues who have visited there since President Niyazov's death have been pleasantly surprised by the degree to which the new president seems to want to open to the West."

...

He also noted the EU's divisions on how to deal with Russia over energy policy. Mr Bryza argued: "There is not unity yet in Europe in terms of a single energy or single gas supply diversification policy. There is an idea that is being realised but it hasn't transformed itself into a unified policy and I assume that, like so many things in this world and this [European] union, it takes a little time."

Bob Amsterdam published an op/ed covering these same issues last September in the International Herald Tribune.

Today I was in Riga, Latvia to meet with journalists, parliamentarians, and opinion leaders to discuss Russia issues, and debate the unique position the country finds itself in vis-à-vis its big neighbor.

Riga has always been one of my favorite destinations in the Baltics, and in the past seven years it has enjoyed one of the highest rates of economic growth in the EU (nearly 12% last year) and a strong and stable democracy. Like many former Soviet states to join NATO in the 1990s, relations with the Russian Federation have often been punctuated by bitter and even hostile exchanges, especially over the treatment of ethnic Russians, energy issues, and an ongoing border dispute.

Views of Riga Old Town

The fruits of the new, cozy relationship were most powerfully demonstrated at the end of last month with the historic signing of a border treaty with Russia, which had been awaiting ratification for about a decade. This was a critical victory for Latvia as it was originally signed before EU membership was granted (and this put them under pressure to enforce the Schengen rules), as well as for Russia, which will now have much looser visa regulations. Most experts doubted that there were sufficient incentives for Latvia and Russia to improve relations, but nevertheless, here we have it.

Views of Riga Old Town

But to what extent do these warmer relations translate into preferential treatment? So far it seems that Latvia has succeeded in bringing back smiles to the diplomatic negotiating table, but in substance, especially in energy, things are not quite yet so easygoing. In the eyes of many Latvians, the continued efforts by the Russians to achieve energy hegemony over the country, in gas, oil, and electricity, is extremely grating, and at times compared to the eternal debate of “occupation” vs. “voluntary alliance.”

Indeed, one of the country’s critical energy issues with Russia remains unsolved. In 2003, Transneft decided to cut off the pipeline feeding the Baltic port of Ventspils, which painfully reduced exports. There are contending theories as to why the Russians are squeezing Latvia at this point, but it may be simple political leverage or an effort to push the sale of 49% of the transport company Ventspils nafta into Russian ownerships (Grigory Luchansky is said to be interested). I wonder if the oil will start pumping again after such a deal is closed?

The Latvians I’ve spoken to are certainly not unaware of what’s at stake here. They know that there are enormous energy security issues in letting a Russian oil exporter (especially a state-owned company) own a majority stake in Ventspils, some believe they aren’t left without any other options. In fact, just as a side note, at one point in 2003, Yukos was considered the leading bidder to take on a stake in Ventspils before the Kremlin’s attack on the company forced the company to withdraw from negotiations, according to media reports.

Sometimes it seems that the countries with long historical experiences of Russian bullying are the first to recognize the dangerous political realities of energy dependence on state-owned firms. Just last May, Latvian Foreign Minister Artis Pabriks warned that EU energy dependence could lead to political dependence: "History tells us that economic factors are and have been quite often used to gain political power, therefore the EU countries have to urgently seek to establish a common energy policy."

During my meetings with Latvian government officials, there was a high degree of interest in the North European Gas Pipeline for obvious reasons. I shared my argument with them that the secret agreement struck between Vladimir Putin and Gerhard Schroeder which made the proposal of the NEGP a possibility (at great political cost to Latvia and others), was in many ways similar to the Molotov-Ribbentrop Pact made in 1939 promising non-aggression between the Nazi Germany and the Soviet Union, and leaving the states in between divvied up into “spheres of influence” according to “secret protocols.” Latvia, in many ways, has been sold up the river by its new EU patriarch Germany, discarded as a consolation prize to Russia.

Victim of German-Russian realpolitik once, shame on you; victim of German-Russian realoplitik twice, shame on me.

It may be too soon to speculate on the meaning of this tactical shift on behalf of the Latvian government to attempt to warm up relations with Russia, but I hope to continue to explore the issue on this blog as I continue my travels in the Baltics.

An interesting subplot to add to the plethora of media coverage on the Dissenter's March held last weekend, was how the authorities handled the journalists themselves.

Covering last year's G-8 Summit was a bit easier that last weekend's demonstrations

While undoubtedly many journalists were left untouched to photograph and scribble away notes on the proceedings, there are also numerous accounts of acts of violence committed against members of the media - and there are rumors abound that Russian TV "scrubbed" its footage and that some OMON officers confiscated film and erased digital photo records of some instances.

Specifically, Kommersant reported that their correspondent Andrei Kozenko suffered a blow to the back, and that Thomas Peter of Reuters "had his face beaten in." The same report notes that Ekaterina Savina of Kommersant received a blow to the back as she was herded along with another group of people including economist Andrei Illarionov into the Metro. Reporters without Borders also reports numerous violations committed against journalists:

Some ten journalists were among the hundreds of people who were clubbed, kicked or manhandled when the broke up the demonstrations. Several German journalists with the public TV stations ARD and ZDF were beaten and arrested. A Japanese newspaper’s photographer was also beaten and the Reuters correspondent was roughed up. Journalists working for local media including Kommersant, Novaya Gazeta and Vedomosti were also the victims of violence. Other journalists were arrested during the demonstration. All had official accreditation.

One of the most interesting accounts about the threats faced journalists on the frontlines of the demonstrations comes Nick Spicer of CBC, who was with the only production crew to capture footage of Garry Kasparov's arrest (which can be viewed here), and was able to record his statements issued from the police van before being carted off. The CBC crew was smart enough to quickly hide the tape in case there was any attempt to confiscate the recording.

Here are some excerpts from Spicer's gripping account of the day:

It is a sad truism of foreign reporting that what a nation's inhabitants see on their TV screens, and what the resident foreign press sees, are often two entirely different countries.

That was never so clear to me than last Saturday when, by being in the right place at the right time, CBC was the only foreign television crew to film the forceful arrest of Russian opposition leader Garry Kasparov.

A CBC cameraman, a producer and I were journalistic flotsam in the violent surge of demonstrators, citizens and riot police, all roiling down Tverskaya Street, the principal avenue leading to the Kremlin.

We were watching a small political movement called "Other Russia," which accuses Russian President Vladimir Putin of turning Russia into an authoritarian regime, as it was trying to hold a rally and march. But some 9,000 riot police were waiting for the marchers on Pushkin Square and neighbouring streets, arresting anyone who looked like they might be a demonstrator.

In the melee, journalists were pushed and hit with nightsticks, old ladies waving the constitution were manhandled and young activists were shoved into waiting police wagons.

Kasparov, famous as a chess grandmaster who habitually crushed his competitors with sheer intellectual power, now had to face brute physical force. This was a match he could not win.
Tell your leaders

Police spotted him before he could say anything in public, then pulled him out of a café where he had taken refuge to throw him into a police wagon. I happened to be standing next to it.

I knocked on the window. It slid open and a man escaped, falling to the ground. Kasparov yelled out: "Tell your leaders that this regime is criminal, it's a police state… they arrest people everywhere."

As if on cue, riot police moved in and shoved us all away. We got it all on tape. We also took the precaution of changing the tape in the camera and hiding the cassette.

An opportunity for Europe?

By Derek Brower, journalist

IN ITS own inimitable way, Gazprom has been flirting with the UK over the past year. Last week, the Russian company claimed that it would like to develop a power station in England, allowing it to sell its own gas to be used in generation. Gazprom already has a marketing presence in the country and, in June 2006, it bought a small gas distribution company, Pennine Natural Gas.

Gazprom territory?

Through Pennine, according to reports, Gazprom has begun targeting prestigious names – like famous restaurants, the National Health Service, and the Headingley cricket ground – in an effort to build its brand in the UK. Meanwhile, it continues privately to brief journalists about wanting to buy a bigger company. Centrica, the UK’s biggest gas distributor, has been a target for some time.

Then there is the Nord Stream pipeline in the Baltic Sea. On Gazprom’s own maps of the line – which is yet to be built and still faces numerous environmental and other hurdles to surmount before it can be – a dotted extension shows it stretching into the UK. Giving the Dutch company Gasunie a 9% stake in Nord Stream in exchange for a similar stake in the Balgzand-Bacton (BBL) gas pipeline between the Netherlands and the UK remains on the cards, and is crucial to Gazprom’s ambitions.

That pipeline started flowing at the beginning of December. It has capacity to supply 15bn cubic metres a year of gas – almost 15% of the UK’s demand. Another pipeline between mainland Europe and the UK, the Interconnector, which has been on stream since 1998, will soon have capacity for 25.5bn cubic metres a year, or a quarter of UK demand. Gazprom owns 10% of that pipeline, too. E.On, the German company closely linked to Gazprom (it owns part of the Russian company) and which is facing competition charges in the EU, is another shareholder in both of these pipelines, owning 20% of BBL and 23.59% of the Interconnector. In total, that gives Gazprom and E.On Ruhrgas large combined stakes in two projects that between them meet about 40% of UK gas demand.

British Gazprom?
Buying Centrica would be another step up in Gazprom’s influence over the UK’s energy markets altogether. Centrica owns British Gas, the former monopoly utility that remains the UK’s largest electricity and gas firm, with around 17m customers.

Centrica falling into Russian hands would pose a big problem for the UK government, which explains why Alan Johnson, when he was minister of trade and industry last year, met with experts numerous times to get legal advice on how to stop it from happening

And given the increasingly poor image of Putin’s Russia in the UK, it would be politically unpalatable for any British government to be seen welcoming Gazprom to its utilities sector. Football teams are one thing. But letting the Kremlin’s energy company take over the old British Gas could be a step too far.

In any case, the UK has done a good job of diversifying its gas supplies and is likely to enjoy a glut of cheap gas in the next few years as new imports from Norway come on stream and new LNG terminals start receiving gas. So it needn’t make any Faustian bargains of the kind Gerhard Schroeder’s government made to secure new Russian imports.

But as Europe’s largest gas market, it remains a big prize for Gazprom, explaining the company’s interest.

That being the case, the UK ought to use the Russian company’s latest declaration of love to show Brussels how to deal with the Gazprom problem. Gazprom wants security of demand for its gas, and sees downstream access as the way to get it. That’s why Gazprom told Eni to hand over 3m customers in Italy to a new local marketing arm in exchange for another long-term supply contract between Russia and Italy. And it is why Gazprom is buying downstream assets and sponsoring football teams in Germany, too. The company’s masters in Moscow understand that a piece of the European downstream will give it influence, profits, and security of demand.

So Europe has something Gazprom wants: customers. And, of course, Gazprom has something Europe wants: gas.

Get tough
Given those fundamentals, the UK should make Gazprom’s future involvement in the country a model of its future involvement in the rest of Europe. If you want access to our liberalised downstream, the UK should say, then give us access to your closed upstream. If you want your involvement here to be protected in law, then ensure that our investments there are protected in law. In other words, ratify the Energy Charter Treaty you signed and start reaping the rewards of reciprocal investment protected by an international treaty.

Liberalised markets ought to welcome foreign investors. But they should also expect that those investors agree with the laws and principles that govern them.

The UK allowed foreign monopolists, like France’s EdF, to invest in its market before, expecting that eventually France would honour its European promises – and legal commitments – and open its energy markets, too. It didn’t work. This time, it should tell the monopolist to make good its own reciprocal commitments first. And it should remind Gazprom that the company’s own interests are at heart: it needs new money in its own upstream as much as it needs new assets in Europe’s downstream.

With its growing supply diversity, the UK is no beggar at Gazprom’s door. That gives it a strategic position from which to talk to Gazprom frankly and with the Russian company’s respect. The UK’s European partners have failed to make a stand for European energy unity in the face of Gazprom’s advances in the last few years. Perhaps it is time for the UK to show them how it is done – and put the European energy relationship with Russia back on a level playing field.

Columnist Anne Applebaum asks which country democracy supporters should cheer for: Russia or Ukraine?

Now, there are some inherent difficulties in judging the merits of these demonstrations, particularly if you are looking, as we Americans love to do, for good guys and bad guys. For it is true that the Russian demonstrators are, in their own words, fighting for freedom of speech, the press and association; that they oppose President Vladimir Putin's increasing authoritarianism; and that they deplore his virtual elimination of political opposition. It is true that there are worldly, well-connected, well-known English-speakers in their ranks. It is also true that they enjoy very little popular support, in part because the Russian media portray them, as the newspaper Izvestia did, as a tiny group of malcontents, probably paid from abroad, who deliberately provoked a fight with the peaceful authorities.

The Kiev demonstrators, by contrast, oppose the Westernization of their country, dislike the idea of Ukraine growing closer to NATO and the European Union, and generally wish for a return to the days when their country was a client state of Russia. Most of their supporters are provincial, not so well connected and probably don't speak English. There are no world chess champions among them. Nevertheless, they do enjoy an important measure of popular support: Although it does seem that their demonstration isn't nearly as much fun as the Orange Revolution was--one observer described the demonstrators as "silent, poorly-dressed throngs of mostly younger men shuffling along Hrushevsky Street under blue flags"--their leader, Viktor Yanukovych, is in fact the elected prime minister of his country, and they did vote for him in democratic elections.

It's a tough choice, I know: Intuitively, one wants to see brighter prospects for democracy in Russia. The Russian opposition is brave, its cause is admirable, and its members and methods are familiar. Unfortunately, the opposition's protest is not evidence of democratization in Russia but rather of its absence. The truth is that the Russian authorities have, through censorship, intimidation and even murder, largely eliminated genuine political debate in their country. As the police reaction to Saturday's demonstration in Moscow well illustrates, even the tiny number of people who want to maintain some kind of public presence outside the mainstream must now be prepared to encounter violence.

This seems to be the favorite question among both bloggers and journalists:

Washington Post excerpt:

Ostensibly, President Vladimir Putin remains popular in Russia. He has presided over impressive economic growth. So why is he so frightened, so unwilling to allow a few thousand opponents to peaceably assemble in central Moscow? The answer ironically may lie in his success at choking off freedoms in his country. The media have been muzzled, and many local elections have been eliminated; the normal mechanisms for people to express their desires and complaints in a healthy society are gone. As a result, to gauge public sentiment Mr. Putin is left with little but the reports of his old colleagues in the former KGB, and that may encourage a tendency toward paranoia.

If there's one thing I can tell you from my experience working the Khodorkovsky case, is that the Kremlin lets you see what they want you see. For us, the encouraged media circus and the staged photo op with the cage in the courtroom, among other stunts, served a distinct purpose for the government: here is a clear reminder for everyone to fear us - we can do anything we want to absolutely anybody, and there is no limit to which we are willing to break the law to do it.

Made for TV Violence in St. Petersburg (AFP)

I am struck with a similar impression of strategic management by the Kremlin in regards to the weekend protests. It is clear from the levels of preparedness and brief quotes we have from various OMON captains that they were sent into the protests to carry out specific orders given long beforehand (and it is my suspicion that the violent crackdown was probably even ordered before the Berezovsky comments). This was not a case of "things getting out of hand" or just random, accidental police violence "caught on tape." The sheer volume of video footage, photos, and column inches is only matched by the abundant instances of truncheon-wielding performances, which indicates a deliberate decision by the authorities to make sure all of Russia and all of the world could see exactly what we saw. If they had really wanted to prevent the protest in a less public way, they were a number of available means at their disposal (they didn't even take away Garry Kasparov's cell phone after they threw him in the van - so naturally he began conducting interviews before he was even processed).

The authorities do not regret what all these news reports captured, and in fact, everything is proceeding according to plan, so naturally the consequences and reactions we are dealing with this week were prepared for and desired by Russia.

The important question therefore is why would the Russian authorities want to everyone to see this open repression? For what purpose would Moscow want to manufacture shock in the international community and escalate tensions?

Domestically, the objectives were very clear: 1) seek to de-legitimize Other Russia as loose-knit group that operates outside the law, 2) entrench a culture of fear to discourage anyone from joining the opposition, and 3) play to the president's base by demonstrating "the strong state" principle.

More importantly, the authorities conducted the arrests in such a manner so as to practically guarantee a specific response from the West which carries an important strategic expediency. The harsh recriminations from the EU, the United States, and other observers, are exactly the reactions that the Kremlin wanted to produce, and further allows them to make the opposition look like it is connected to the West, and further seek to de-legitimize the movement in the eyes of the Russian public. They push, shove, and arrest Kasparov, wait for the West to come to his defense, and all of a sudden the issue of "international meddling" in Russian politics that they so often complain about becomes an apparent self-fulfilling prophecy.

Furthermore, the critical statements out of Washington and Brussels are a political gift to the Kremlin, providing another opportunity to be defiant before the other great powers and rouse nationalist sentiment (after all, what could be more annoying than having another nation "scold" you?). To be quite honest, it is a page from the George Bush playbook - a president loves to be seen as "under attack" from foreigners, which he must aggressively defend his people from. Like it or not, many people (in both Russia and the USA) do not easily distinguish between the criticism of a government and the criticism of a country, and having the opportunity strike a pose of indignation and moral outrage in reaction to these unfair "double standards" from the West plays extremely well at home, and helps the president cement the support of his faithful during this critically vulnerable year.

Shocking the West and escalating geopolitical tensions in order to ensure the smooth functioning of a dictatorship is a fine line to walk, and the Russian authorities have already demonstrated an adroit management of these kinds of "constructive tensions." Thanks to energy allies in Europe and the government's critical relationship with Iran to keep the Americans at bay, the Kremlin has seen it fit to gradually ratchet up tensions in other areas.

The diplomatic give and take that occurs over the next several weeks in response to this bold gesture of repression will largely determine whether the authorities will take a step back, or receive the tacit international approval to continue down this line.

From ITAR-TASS:

Court says probe into Khodorkovsky case unlawful MOSCOW, April 16 (Itar-Tass) --The Moscow City Court on Monday confirmed that the investigative actions related to new charges brought against former YUKOS owner Mikhail Khodorkovsky and his business partner Platon Lebedev in Chita were unlawful.

In March 2007, Moscow’s Basmanny Court upheld the defendants’ complaint and ruled that the investigation was unlawful.

The court thus obligated the Prosecutor General’s Office to bring Khodorkovsky and Lebedev back to Moscow for investigative actions at the place where the crime was committed.

There are no proper conditions in Chita to ensure the completeness of the investigation as there is no evidence to substantiate in the case in Chita.

“It is very hard both our defendants and the lawyers to be in Chita. What kind of witnesses could we invite to Chita? Who will go there? Now we have new possibilities for finding and presenting evidence in the Khodorkovsky case,” Shmidt said.

Under the law, Khodorkovsky and Lebedev will be tried in Moscow.

Khodorkovsky and Lebedev will be brought to Moscow for additional investigative actions, the lawyer said.

“According to today’s court ruling, the Prosecutor General’s Office has to bring Khodorkovsky and Lebedev to Moscow for investigative actions within the framework of a new case,” Shmidt said.

He expressed hope that the Prosecutor General’s Office will not contest the court ruling. But if it does, “this will not provide grounds for suspending the implementation of the ruling”.

The lawyer did not rule out that Khodorkovsky and Lebedev may face new charges in Moscow.

Complete article.

Last March 28, Andrew K. Woods published a very interesting article on Slate about the Khaled el-Masri case and the use of online video sites like YouTube by human rights advocates. Woods writes "As user-generated outlets like YouTube grab an ever-greater share of the media market, human rights activists will increasingly depend on online tools to change the cultural landscape and with it, they hope, the legal one."

True to form, civil society leaders in Russia have stormed the internet to post numerous amateur videos and borrowed news clips from the weekend protests. These are just a few examples - there are many more.

These are from a German television source (ARD Weltspiegel).

And here is some amateur footage:

Today Yulia Tymoshenko puts forth what I would say is a very reasonable appeal regarding her concerns over Russian expansionism:

Demand a level playing field

By Yulia Tymoshenko

In the aftermath of the Soviet Union's collapse, it was assumed that Russia's imperial ambitions had vanished - and that foreign policy toward Russia could be conducted as if former diplomatic considerations did not apply.

Yet they must apply, for Russia is a rich and ambitious nation that straddles the world's geopolitical heartland. Encouraging economic and political reform - the West's preferred means of engaging Russia since communism's end - is of course an important foreign policy tool.

But it cannot substitute for a serious effort to counter Russia's long-standing expansionism and its present desire to recapture its great-power status at the expense of its neighbors. Russia must be engaged as the world power it is, but it must also be held accountable to the standards of a responsible nation-state, both in its relations with the West and with the neighbors it has long dominated.

Read complete column here.

I just got off the phone with Eduard Limonov, the leader of the National Bolsheviks (NatsBols), a party consistently under attack from the Putin regime, to hear his first hand account of the weekend's demonstrations. Limonov confirmed that he was arrested in an apartment after the march by heavily armed special forces in what sounded like rough scuffle. He now faces two charges, one of resisting arrest and one of fomenting an illegal demonstration, and will be in court on the 26th of this month.

Limonov was categorical in his view that "the repressive conduct of the regime has now been demonstrated for the world to see."

Many of the people I have spoken to today who were present at the marches in Moscow and St. Petersburg are gauging the meaning and implications of the crackdown. I am hearing a lot of different opinions, but the general consensus seems to be that this "dramatic escalation" is going to create a stronger opposition movement, and neither side shows any signs of changing their course.

The attached statement is being circulated to media today:

“The Kremlin Is Not the Only One Responsible for Repression,” says Robert Amsterdam

LONDON, April 16 – Following a multitudinous anti-government demonstration in central Moscow yesterday and the subsequent mass arrests of hundreds of protesters, international lawyer Robert Amsterdam issued the following statement:

“The palpable fear in the streets of Moscow is not that of the demonstrators, but that of the autocrats clinging to power in the Kremlin,” Amsterdam said. “Those Western investors are again on notice that they are supporting an abjectly undemocratic regime. Let Lord Browne of BP, Paulo Scaroni of ENI, and Gerhard Schroeder of Nordstream be held accountable for their uncritical support of a government that freely beats its citizens before the eyes of the world.”

“The Kremlin is not the only one responsible for the repression of this opposition march,” Amsterdam said. “It is time we all recognize that the Russian government will only do what it believes it can get away with, and right now our businesses and some political leaders are giving it a free pass toward despotism.”

Robert Amsterdam is the founding partner of the Toronto- and London-based international law firm Amsterdam & Peroff. He maintains a blog at www.robertamsterdam.com.

Once led by the sole voice of Adris Piebalgs, more and more EU officials are beginning to take the gas opec threat seriously, and are renewing their calls for efforts to form a common energy policy. However, these efforts are being consistently derailed by Russia's bilateral deals with individual EU states, such as the joint-venture power plants in Germany and the recent cozying up to the Greeks:

Last Wednesday, Gazprom Chairman Alexei Miller made a quick trip to Athens, promising the government his company could cover Greece’s natural gas needs until 2040. It was officially announced that Development Minister Dimitris Sioufas requested an increase in the guaranteed natural gas supply from 2.8 billion cubic meters (bcm) until 2016 – as the agreement with state natural gas company DEPA stipulates – to 5 bcm until 2040. DEPA would be guaranteed the 2.8 bcm while Gazprom would trade the remaining amount on the Greek market or through third companies. The aim is to sign a bilateral agreement by the end of the year.

Apparently, Gazprom not only wants to become Greece’s long-term monopoly gas supplier but also wants to trade directly and not through DEPA. It has followed a similar policy in Italy and France, putting domestic companies in a difficult position. Gazprom appears to be preparing its entry as a retailer using Prometheus Gas, the company it set up jointly in 1991 with Greece’s Kopelouzos Group, whose owner, Dimitris Kopelouzos, is a former New Democracy MP.

This increased natural gas supply to Greece must find an alternative pipeline to the one now supplying Greece via Ukraine, Romania and Bulgaria. This would mean using the Greek-Turkish pipeline, now under construction and expected to open this summer. Gazprom is mostly interested in the planned extension of this pipeline to Italy, which would allow it to supply Western European markets with 11 bcm of gas.

However, Gazprom hasn't found the English hospitality to be quite as warm. In response to its efforts to achieve direct access to the UK market and its bids for NHS contracts, the opposition Tories are taking steps to raise their concerns over Gazprom's reliability as a supplier:

...Campaigners assert that the Kremlin’s track record of witholding gas supplies during political disputes with other countries, such as Ukraine and Georgia, raised serious questions about patient welfare. Health Emergency, an NHS pressure group, said that any such contracts would represent a “horrific gamble with people’s lives”.

“The NHS should avoid using Gazprom as a supplier if it is able to do so,” Richard Bacon, Conservative MP for South Norfolk and a member of the Public Accounts Committee, said. “Russia has proved it is not a reliable supplier of gas. When you have sick patients relying on its energy at their bedside, can you really trust Vladimir Putin to be their major supplier?”

An excerpt from an excellent Kommersant article covering the weekend's demonstrations:

"Let him go, he's fine, he's just goofing off. He's not a democrat," coaxed journalist Viktor Shenderovich upon seeing police detaining a drunk man in a ski cap. "Now he will be," promised the OMON officer. "Well, that's true, a few whacks of your truncheon and anyone would turn into a democrat," sniffed Mr. Shenderovich.

From today's WSJ:

Dissent in Russia

Wall Street Journal editorial, April 16, 2007

Peaceful protest is not a right accorded the subjects of Vladimir Putin's Russia. The violent clashes between riot police and pro-democracy demonstrators in Moscow and St. Petersburg over the weekend are business as usual for the master of the Kremlin.
[Garry Kasparov]

Several hundred protestors were arrested, including Garry Kasparov, who was taken into custody Saturday on his way to the square where the Moscow rally was held. Mr. Kasparov, a former world chess champion, has won new prominence in recent years as Russia's leading democratic activist. He is the moral force behind an umbrella group of opposition groups known as the Other Russia, which organized the rallies.

Here is Mr. Kasparov's account of his arrest: "We were walking down the middle of the pedestrian walkway, not holding any flags or even shouting," he said in a statement. "They cut us off on both sides and when we stepped into a cafe the police pursued us and took us out. I say 'police,' but they failed to identify themselves or to give any reason for our arrest." After 10 hours in jail, he was fined and released. Mr. Kasparov was lucky. Many other protestors were beaten.

Mr. Kasparov also serves as a contributing editor of this newspaper and has been writing on Russian democracy for us since 1990. In his most recent article, published on March 30, he predicted the current violence. Mr. Putin, he wrote, would crack down "on any sign of public of political opposition, no matter how small, using overwhelming force." Mr. Putin cannot risk a Russian version of Ukraine's grassroots Orange Revolution.

In advance of the weekend rallies, it didn't help the protestors' peaceful cause that exiled Russian tycoon Boris Berezovsky gave an interview to a British newspaper saying he was plotting the violent overthrow of the Putin government and was already bankrolling Kremlin insiders to plot a coup. "It isn't possible to change this regime through democratic means," he told the Guardian. "There can be no change without force, pressure." Mr. Kasparov says, "The Other Russia has nothing to do with Boris Berezovsky."

In seeking a peaceful alternative, Mr. Kasparov and his coalition have their work cut out. The Other Russia's coalition is small, diverse -- its members include nationalists and Bolsheviks as well as well-known democrats -- and, it is fair to say, shaky. While it is united in wanting to oust Mr. Putin, it lacks a common vision for a post-Putin Russia. The coalition's immediate aims are to broaden its support and agree on a candidate for next March's presidential election. The constitution prohibits Mr. Putin from running for a third term, though there is widespread speculation he will find a way to do so.

With little access to the state-controlled media, rallies such as this weekend's are the only way for the Other Russia to draw attention to its democratic aims. For now, the outside world is the only opposition voice heard loudly in the Kremlin -- and so long as Mr. Putin can trumpet Russia's membership among the G-8 democratic powers, it will be hard for Washington or other Western democracies to get his attention.

Mr. Putin's seven years in power have been marked by ever-greater state control of the media, and by a steady erosion in the rule of law and democracy. Parliamentary elections will be held later this year and the presidential vote is scheduled for next March. These campaigns are just getting under way, and the question is whether the weekend violence is a harbinger of bloodier days to come.

Blogger Sean Guillory relatively recently posted a very interesting entry on the Human Rights Watch reports on both Russia and Guantanamo. He writes:

It seems that when it comes to torture the Bush Administration and Russia are joined at the hip in other ways. On March 27, Bush did a photo-op with Russian Major-General Vladimir Shamanov. The Major-General was visiting the White House as the co-chairman of the Russian-US Commission on mission soldiers. Shamanov, according to HRW, “is implicated in grave human rights abuses, including the killing of civilians in the villages of Alkhan-Yurt in 1999 and Katyr-Yurt in 2000, and the illegal detention and torture of detainees in 2000.” HRW documented these abuses in a report in 1999. In addition, according to the Washington Post, “The European Court of Human Rights also has found Shamanov's troops responsible for the "massive use of indiscriminate weapons" that killed civilians in another village, and human rights investigators concluded that detainees at a base under his command were beaten, subjected to electric shocks and held in pits.” Shamanov called these allegations as “fairy tales” in 2004.

The Bush Administration’s ignominy results not so much from meeting with Shamanov. After all, officials responsible for atrocities are easy to find working there daily. It comes from its feeble attempt to claim that it didn’t know about Shamanov’s crimes. As White House spokeswoman Dana Perino told reporters, “The president was not aware of the allegations made against (Shamanov) and he was seeking to sharpen the focus on the commission’s good work.”

Not aware!? Perhaps a White House staffer should have consulted the Internets and do a search on the Google. Think Progress did and they found that “a quick Google search of “Vladimir Shamanov,” references to the general’s role in the killings come up on the first page.” Plus are we really to believe that anyone would get as much as a pinkie finger into the Oval Office without extensive background checks? Is White House security really that lax?

Click here to read the full post.

An editorial in today's Times:

Beware. The claws are there

Like the end of history, the end of the cold war turns out to have been little more than western wishful thinking. And like history, the cold war seems to be repeating itself. Once again chilly winds are blowing across the steppes and over the rest of the world; perestroika and glasnost are little more than memories. Russia today is beginning to resemble the old Soviet Union — repressive at home and aggressive abroad. President Putin is quick to stamp on opposition. One has only to think of Anna Politkovskaya, of Mikhail Khodorkovsky and of Alexander Litvinenko.

Yesterday it was the turn of Garry Kasparov, the former chess champion, to feel the grip of the new authoritarianism. He was arrested at an anti-government rally in Moscow. Mr Kasparov is a critic of Mr Putin and head of a group called the United Civil Front. Other activists and several journalists were also arrested in a massive police operation that is becoming standard in Russia.

Clearly not all Mr Putin’s critics are disinterested freedom fighters with pure democratic motives; equally clearly much of what they say is true. He inherited a country with an independent parliament, a free press, a healthy political opposition and fair elections. He has dismantled most of it. He now talks of “managed democracy” in which the Kremlin runs a pseudo-opposition.

Those who prefer to ignore Russia’s internal affairs, or think of them as transitional, cannot afford to ignore Mr Putin’s international stance. Although he may not actually beat the conference table with his shoe, as Nikita Khrushchev did at the United Nations in 1960, he is increasingly prepared to display aggression to world leaders. Ruthless to Chechyna and Ukraine, he makes no secret of his contempt for the European Union and Nato. He recently signed a deal to help Iran with its nuclear project despite international protests and he is using US missile defence plans as a justification for returning to the arms race. The bear is showing its claws again and the West had better take note.

For easier navigation, here is a list of the posts from yesterday covering the Dissenter's March:

1. RA Statement on Kasparov Arrest

2. Garry Kasparov speaks to the media from the courthouse

3. Kasyanov pushed and shoved by the OMON

4. Phone call from Moscow

5. Photo digest of the dissenter's march

6. Grigory Pasko: a dispatch from the frontlines

7. Garry Kasparov and Karinna Moskalenko talk to RA

I just finished a late night phone call with Garry Kasparov and Karinna Moskalenko in Moscow, and have a some comments from them I can share.

After surviving a long ordeal in the courthouse, Kasparov told me tonight that “Russian justice hit a new low today. The authorities have violated the spirit of every law.”

Tonight Garry was convicted of a minor infraction by the testimony of an officer who could not substantiate the venue of the arrest, the time of the arrest, or the circumstances of the arrest.

Both Garry and Karinna empathized with the young judge placed in this awkward situation without warning, and Karinna said it reminded her of the unlucky young judges we had during the Khodorkovsky trial, who were so clearly intimidated by the pressures being put upon them by the authorities.

During the hearings today, Moskalenko was not allowed to put on her witnesses, and her request to recuse the judge was rejected. Kasparov was found guilty and subjected to a 1,000 ruble fine, but the key point for Garry is that now he will not able to go to St. Petersburg for the demonstrations planned for tomorrow. Kasparov told me that he believes that the length of today’s process was artificially drawn out to make sure that he could not get to St. Petersburg.

Karinna said that a Duma member who attended the demonstration witnessed grave acts of violence committed against peaceful demonstrators, and they are reaching out to him and others to come forward to denounce the crimes.

Did someone say martial law?

The Russian power fears the Russian people

Grigory Pasko, journalist

I counted around two dozen trucks filled with soldiers speeding towards Moscow from Balashikha along Shchelkovskye chaussé at eight o’clock in the morning on 14 April (see photo of one of the trucks).

Photo of truck with internal troops heading for Moscow by Grigory Pasko

Units of special-designation [“spetsnaz”] police detachments were converging on Moscow from all over Russia all day on Friday the 13th. They were well equipped and, as subsequent events showed, well instructed as well. Thus, the places where the oppositioneers were to hold their “Marches of Those Who Disapprove” were already cordoned off by police detachments that night. For this reason, to get through to Pushkin Square, for example, did not prove possible.

The police not only stood there as a human chain, but also infiltrated into the ranks of potential rally participants and dispersed them. Those who did not want to be dispersed were literally pushed apart. Seeing as how some opposition activists were already detained even before they got to the places where the actions were to start, we can assume that the OMONs had received photos of them during their briefing.

Another detail: There were water cannon parked along Tverskaya street – most likely those same ones that had been bought in a large batch from Israel last year. Unfortunately, the Russian police didn’t have a chance to try out their new toys this time around – they’re already so good at protecting the power from the people that their truncheons and elbows proved as effective as any water cannon.

According to a communiqué from the police leadership, around 9 thousand officers of the law enforcement organs were involved in “ensuring public order during the time of mass actions”. Personally speaking, looking from the side it was very clear that the disorders were being created by none other than the police.

According to various sources, in excess of three hundred persons were detained by the police that day. Among their number – the leader of the youth “Yabloko”, Ilya Yashin; the leader of the youth movement “Da”, Maria Gaidar; many journalists; and the leader of the United Civic Front, Garry Kasparov.

Photos of rally taken from www.svobodanews.ru

“Before my eyes the OMON in the area of the ‘Akter’ gallery was simply hammering little old ladies with truncheons, was hammering pensioners with truncheons, pensioners who were standing on the corner that is weren’t doing anything, weren’t holding any slogans, weren’t shouting out anything. They hammered them with truncheons, chased them, beat them in the back. This is simply abhorrent, impossible lawlessness”, told State Duma deputy Vladimir Ryzhkov on the air on the radio station “Echo Moskvy”.

An attempt was undertaken to detain the leader of the People’s Democratic Union, Mikhail Kasyanov. But his bodyguards did not let the OMONs arrest the former prime-minister of Russia.

The march as such never did take place. Or a rally. There were some brief speeches in the vicinity of Chistoprudny boulevard by Mikhail Kasyanov and the writer Shenderovich, and former State Duma deputy Irina Hakamada shouted out the slogan “Give us back elections, you vipers!”

Photos of rally taken from www.svobodanews.ru

According to the assessments of journalists, around two thousand persons took part in the action.

On the evening television programs, nearly all the television channels reported on the march of those who disagree. The intonation was like this: here the oppositioneers passed by, but here, on the Sparrow Hills – supporters of the power and president Putin, of whom there were several thousand.

As deputy Vladimir Ryzhkov noted, Moscow resembled a city under martial law.
And my final observation. I have seen various OMONs at various rallies. But those who were dispersing the peaceful demonstrators today in Moscow were the best equipped I’ve ever seen. And they looked well fed, content, and ready to do anything for their employers. Even kill someone. Just give the order.

One more thing. It is said that Putin was nowhere near Moscow that day.

Garry Kasparov and Karinna Moskalenko at the courthouse (AP)

Kasparov, pre-arrest (AFP)

Protesters clash with police (AFP)

Demonstrators reported violent encounters with police (AFP)

AP

Reuters

An opposition protester carries a Russian state flag during a demonstration in Moscow April 14, 2007 (Reuters)

Reuters

I have spent much of the day on the phone with friends and colleagues in Moscow who have been personally impacted by the near state-of-emergency style crackdown of the Dissenter's March. According to everyone I have spoken to, the air is crackling with tension (putting 9,000 paramilitary troops onto the city streets tends to work up the nerves).

One close friend, whose name I can't share for her safety, was holed up in the offices of a major human rights NGO in Moscow during the March. The senior representatives of this NGO strongly advised them not to go back outside, and to "definitely NOT go to the march or anywhere near it. They will arrest anybody - everybody."

I have also been on the phone with Karinna Moskalenko, attorney for Garry Kasparov, who has spent the afternoon and evening at the courthouse. In the middle of my conversation with her, the phone line went dead. I continue to try to get in touch with her, and hope to share a report with you soon.

A harrowing (and ultimately very sad) scene conveyed by the IHT as the riot police circle in on Mikhail Kasyanov:

Kasyanov, the former prime minister, was surrounded by riot police as he approached the rally on foot. "Everybody should ask themselves what is happening in our government," Kasyanov said, as the police closed in. "We respect the Constitution and demand the authorities do the same."

"Take them one by one," a police officer commanded over a bullhorn.

The police grabbed Kasyanov's bodyguards, arresting them, and Kasyanov tumbled backward but was caught by the crowd. "Officers, don't fulfill illegal orders," Kasyanov shouted. "Officers, stop!"

Protest organizers are reporting instances of excessive force and police brutality. Video footage of the march can be seen here.

Reuters: Special police officers gather near Red Square in central Moscow, April 13, 2007. The centre of Moscow was lined with riot police and armoured trucks on Saturday as the authorities prepared to stop opponents of President Vladimir Putin staging a banned protest. Photo Denis Sinyakov.

Here are Garry Kasparov's comments to the media following his court hearing today:

"Today the regime showed its true colours, its true face," said Kasparov, who turned 44 on Friday, and is one of the leaders of Other Russia.

"I believe this was a great victory for the opposition because people got through and the march happened," he said to applause from about 10 supporters carrying roses.

Kasparov was defiant and spoke confidently during a brief adjournment in his court hearing. He was accompanied by his lawyer, Karina Moskalenko.

"We were arrested when we were doing nothing. There was no action. We were just walking along," he told about 20 reporters.
...
"There was simply a criminal attack by people in riot-police uniforms on Russian citizens who were just walking along," he said. "Every possible (procedural) violation has been committed, from the moment we were grabbed up to this court."

Kasparov then returned inside the court building.

"I have to go back in now, because if I'm late they'll charge me with another violation."

From a Washington Post piece on the color revolutions, some Russians long for the ability to have such freedom to dispute their views in the public sphere:

"Oh, how I envy our neighbor," commentator Boris Vishnevsky wrote of Ukraine in the newspaper Novaya Gazeta. "They have a vibrant life and movement toward the future, despite mistakes and stupidity. "

Today's arrest of opposition leader Garry Kasparov provides yet another frightening indication of how far Russia has fallen in respect to even the most basic political freedoms. When the riot police rounded up the protesters at the March of Dissenters today in Pushkin Square for mass arrest, the crackdown showed all signs of being coordinated and strategically designed from the highest levels, deploying an overwhelming show of force and numbers to achieve the maximum effect of fear. I'm told that several buses full of participants from Other Russia were pulled over by police and prevented from entering the city, among other arbitrary diversions, delays, harassment, and interventions. Groups of people walking near a Moscow metro station, not even carrying party signs, were rounded up for arrest and taken to undisclosed locations for interrogation.

This unruly, dangerous protester is armed with a flower and a newspaper

"The gross violation of human rights" committed today by the Russian government has all the appearances as going down in history as a tipping point. Any government that is so openly afraid and vigorously intolerant of public expressions of political beliefs puts its legitimacy into question. This fact is not lost upon the current leadership in the Kremlin, and it seems that much of the recent political instability and rapidly increasing intolerance for opposition in Russia is rooted in this apparent lack of faith in the legitimacy to govern by those in the government themselves.

In the coming week, we will see much indignant and outraged posturing roll out from the procuracy general's office as they aggressively try to negotiate the extradition of Boris Berezovsky for his ill-advised comments about leading a coup made on Friday. But if they are sincerely committed to prosecuting those who violate constitutional norms, they need not bother with the politics of extradition - the true violators are sitting just down the street in the Kremlin.

From the BBC:

Kasparov arrested at Moscow rally

Mr Kasparov was arrested amid a "colossal" police presence

Police have arrested Russian opposition leader Garry Kasparov at a banned anti-Kremlin rally in Moscow.

He was detained during a huge security operation to prevent protesters from gathering at Pushkin Square. Police deny reports he has now been freed.

The former chess champion leads the United Civil Front group, part of the opposition coalition Other Russia.

It accuses President Vladimir Putin of trampling on democracy. The Kremlin says Other Russia destabilises Russia.

As he was being taken away, Mr Kasparov told Russian Ekho Moskvy radio that he had been "walking with a group of people along the pavement without any slogans" when riot police had surrounded them.

"They grabbed everyone without distinction, without asking any questions," he said.

More than 9,000 police had been drafted into Moscow to prevent the rally going ahead.

Mr Kasparov's swift arrest followed warnings by the prosecution office on the eve of the march, stating that anyone participating risked being detained.

And Mr Kasparov said the security presence meant the rally could not go ahead.

"I suppose it will be quite difficult to do anything now, you see, everything is shut off - there is a war-like situation in the city centre, as a matter of fact," he told Russian radio.

The planned march came as Russia warned it wanted the extradition of London-based exile Boris Berezovsky.

Mr Berezovsky told the UK's Guardian newspaper he was plotting "revolution" to overthrow Vladimir Putin.

Accusing Mr Putin of creating an authoritarian regime, the tycoon said that Russia's leadership could only be removed by force.

Later, he clarified his words, stating that he backed "bloodless change" and did not support violence.

Other Russia has called for another massive march in St Petersburg on Sunday, which Moscow has also banned.

Europe is still worried about what Gazprom will do next. The bigger problem is what it won’t do

By Derek Brower, Journalist

DO YOU want Putin’s paw on the pipe, asked the Economist not too long ago. It summed up nicely Europe’s biggest worry. What happens the next time the Russian President gets in a huff about one of his neighbours and cuts off gas exports again, as Gazprom did to Ukraine in 2006?

But there is a better question: what happens if Gazprom doesn’t have enough gas to supply all of its customers in time?

Something needs to fill that pipeline

That question is less sexy. And at first glance, it doesn’t involve the same geopolitical gamesmanship that many took to be at the heart of the so-called gas war between Ukraine and Russia at the beginning of last year. But it is the question that sits at the back of almost all of Gazprom’s activity right now. The gas Opec threat? Meddling in Central Asia? Shady deals with European companies? All of them, to some extent, reflect Gazprom’s insecurity in its own upstream.

The numbers aren’t encouraging. Vladimir Milov, a former deputy energy minister of Russia and now the head of the Institute of Energy Policy in Moscow, says that Russia could face a gas shortage of 100bn cubic metres (cm) a year by 2010. That would be just shy of a quarter of Russian demand, and would represent a grave failure for a company that controls 27% of the world’s natural gas reserves.

Others forecast the number to be even higher. In a paper for the Centre for European Policy Studies, Alan Riley says that the supply crunch will be around 126bn cm/y by 2010. But it could be as high as 200bn cm/y, he adds.

Gazprom rejects such numbers. Alexander Medvedev, head of the company’s Gazexport arm, told me last year that there would be “no shortage of gas in Russia either by 2010 or by 2020”. But taking the company at its word in the face of other statistical evidence is not easy.

Between rocks and hard places
Any shortage would leave Gazprom facing a difficult choice. Should it break its supply agreements to European customers, who pay market prices for its gas? Or should it cut supplies to Russian industry and people, the constituency of Gazprom’s famous “social obligation”? Given that Gazprom alone accounts for around 20% of Russia’s tax revenue, income from exports is important. But the Kremlin won’t want its gas company to punish Russian voters, either.

Who is to blame? One fact is indisputable: Gazprom hasn’t spent enough in its own upstream to keep production growing. Some $70bn is required to develop three new giant gasfields in the Yamal peninsula. In the meantime, it has been spending money to buy other companies, like Sibneft. That has brought some new gas reserves to Gazprom. But it has also brought lots of debt. And, as investors in the energy industry like to remind their companies, buying reserves from other companies isn’t the same as finding more of them in the ground.

And Gazprom has also spent large sums on “other” sectors, such as media – round $14bn, according to some estimates. That's almost as much as it would cost to develop the Bovanenkovskoe field, the largest of the new fields Gazprom wants to bring on stream in Yamal, according to Wood Mackenzie, an oil consultancy.

There are, of course, other factors. Demand for gas in Russia continues to grow by around 2.5% a year. And it is being bolstered, says Riley, by Gazprom’s “perverse” decision to press on with rural and urban gasification. The company wants 60% regional gasification by 2008 and is spending $1.3bn adding another 12,000 km of pipelines to its network. That might be good news for pipeline efficiency and the environment, but it would add at least another 9bn cm/y to demand. Riley says the figure could be closer to 20bn cm/y. Meanwhile, losses from inefficient gas processors on the network amount to some 46bn cm/y. Losses from gas flaring in Russia amount to 60bn cm/y, according to the International Energy Agency. That’s almost as much gas as Italy consumes in a year. (Officially, Russia admits to 15bn cm/y of flaring.)

Meanwhile, over the last six years, Gazprom’s production growth has been stagnant, with the decline of the producing fields in the north particularly stark. Milov blames state interference in Russia’s energy sector. In contrast with Gazprom, whose majority stakeholder is the Kremlin, the independent producers in Russia have rapidly increased their production.

Cheap gas
A deeper problem is in Russia’s economy, says Jonathan Stern, of the Oxford Institute for Energy Studies. Russia’s industry is addicted to cheap natural gas. Increasing prices is part of the answer, and one that the Kremlin seems to have accepted. In November, it said prices for natural gas to industrial users would rise to around $125 per 1,000 cm by 2011 – double, in real terms, what they are now.

That gives Gazprom some of what it wants. My sources in Moscow tell me that the company has effectively held off spending on new fields in Yamal as a way of forcing the government’s hands over price increases. That makes sense. Stern says that developing the Yamal fields could cost around $70 per 1,000 cm. Until prices in the domestic market pass that mark, Gazprom would make a loss on the fields in its own country. Gazprom hopes to have those fields on stream by 2011, though most analysts say that is optimistic. The OECD predicts that they will be on stream in 2015, at the earliest. Those reserves are critical to Gazprom. Bovanenkovskoe field alone, which Gazprom wants to bring on stream first, could eventually produce 115bn cm/y.

As for fields like Shtokman, in the Barents Sea, if Gazprom is truly to develop the reserves on its own it will need even more cash to do it. The likelier outcome is that the company will concede that at least one foreign partner is needed – both for financial and technical reasons. But until some clarity emerges about how the field will be, the date of its debut gets more distant.

That means that the gas shortages could emerge despite the increase in natural gas prices that Gazprom has been seeking.

And it returns the issue to the fundamental problem of Russia’s ageing industrial stock and its colossally inefficient use of energy, says Stern. Only 20% of the country’s Soviet-era plants and infrastructure has been replaced in the last decade; even less was replaced in the Yeltsin period. That leaves the bulk of industry badly in need of being replaced if Russia is to use gas more efficiently.

In turn, suggests Stern, that means the country’s industrialists must have faith that their property is safe and worth the large investment needed to replace it with new expensive, but more efficient, machinery. The legacy of the Yukos affair, he says, has undermined that confidence.

What is to be done?
So what can Gazprom do? There are two other sources of gas that the company wants increasingly to tap. The first is domestic: the local independent gas producers. Their growth in production has been spectacular, especially compared with Gazprom. The government forecasts that they will account for 20% of supply by 2020, compared with 13% now. The IEA suggests that the figure could be much higher, closer to 40% by 2015. But that success has attracted Gazprom. It bought Sibneftgaz (and the Beregovoe gasfield), Yamal LNG (and the South Tambey gasfield) and part of Novatek in 2006 and is likely to take control of the Kovykta gasfield from TNK-BP later this year. Milov says Gazprom’s involvement could destroy the sector’s growth.

Stern disagrees, and says that a “sea change” in attitudes inside the state-controlled company means that the independents are now seen as “part of the solution”. Since Gazprom bought 19.99% of Novatek its production has not suffered, he points out. And he says that there is evidence of Gazprom offering the independents access to its infrastructure. However, until and unless these companies are ever allowed to build and own their own infrastructure – and export their gas – their role will be strictly controlled by Gazprom, even if they remain independent in name.

The other source of gas is Central Asia. Gazprom hopes to import up to 105bn cm/y from Turkmenistan, Kazakhstan and Uzbekistan by 2011. Bizarre as it seems that the world’s biggest gas exporter should import gas from its neighbours, Stern says it makes good sense: Turkmenistan’s gas is cheaper to buy than Gazprom’s Yamal gas is to develop.

But Riley warns that Gazprom ought not to rely on those volumes of gas from the region. Turkmenistan’s own chronic underinvestment means that exports of some 80bn cm/y to Russia by 2011 are optimistic. And the pipeline infrastructure in Central Asia that Gazprom relies on for those imports is decrepit. Nor is there much faith among independent analysts that Turkmenistan has as much gas as it says it has. But the region’s importance to Gazprom means that Moscow will continue to keep a close eye on how Turkmenistan, in particular, develops politically.

Not just Russia's problem
All of this should worry the EU, Russia’s most important foreign market. While politicians have, since the Ukraine gas war, focused on the political risk associated with imports from Russia, Riley says that has distracted them from the real issue, that Gazprom might cut supplies for good old market reasons of scarcity. Stern says that even if Gazprom succeeds in meeting all of its commitments, its exports to Europe will be limited in future to 200bn cm/y. The EU, he says, hasn’t realised that, either.

What the European politicians haven’t realised, the continent’ companies have. The prospect of a supply crunch in Russia, or of a cap on exports, has triggered a rush among importers in Europe to sew up contracts while they can. That has worked in Gazprom’s favour. A deal in November 2006 with Italy’s Eni guaranteed Russian sales into Italy of 28.5bn cm/y (36% of Italian demand) until 2035. In exchange, Eni offered Gazprom a downstream foothold in one of Europe’s biggest gas markets. The small print seems also to have included a stipulation that Eni participate in a shady deal to buy assets on Gazprom’s behalf at the Yukos auctions earlier this month.

Hungary and Germany have also seen the writing on the wall. Their bilateral deals with Gazprom to build new pipelines into Europe will effectively turn both countries into satellite energy states for Gazprom. The company is already publicly referring to both countries as “hubs” in Europe for its gas. Those pipelines should guarantee supply of gas into Germany and Hungary. But in exchange they hand over the security of their supplies to Gazprom. The strategy seems to be: sign the contracts now – while there is gas to be bought; and worry later about the consequences.

It seems likely that Gazprom will soon move to buy downstream assets in continental Europe, too. For a company with limitations on its exports, that would make sense, allowing it to maximise prices on sales by marketing the gas itself.

And the essential upstream weakness of Gazprom is another reason for the gas Opec bluff. Lack of spare capacity and the fundamental nature of the world’s various gas markets mean any effort to form an international gas cartel would be unlikely to work. Russia, above all other exporters, knows that. But talking up the prospect of a gas Opec is another matter. It helps mask the problems in Russia’s own gas sector while at the same time tries to convince consumers that power is in the producers’ hands.

But Russia’s upstream problems should also be an opportunity to move into a new era of energy relations between Moscow and Brussels. As Milov points out, Gazprom’s problems are chiefly related to state interference and the lack of liberalisation in Russia’s energy sector. This could be the hour of the Energy Charter Treaty. Russia needs heavy upstream spending, competition among its gas companies, full price liberalisation and a fundamental overhaul of its Soviet-era industrial stock. As long as the state’s grip over the country’s energy sector remains so strong, none of that is likely. Winning that argument in Moscow might only be possible after the supply crunch really starts to bite.

A blurb from the May 2007 edition of Harper's Magazine, page 18. The magazine allows the excerpt to speak for itself.

THE SPY WHO SHOVED ME

From the preface to Judo: History, Theory, Practice, by Vladimir Putin and others, published in 2004 by North Atlantic Books. Putin is a sixth-degree black belt in judo. the preface is by George Russel Jr., cochairman of the EastWest Institute.

Whatever else English-speaking people may know about the career of President Putin, they should realize that he is a judo master. His judo-based senses of discipline, honor, and service to humankind as president of Russia tower over any of the more menial roles assigned to him in the former Soviet Union. Insofar as judo is at his core, he brings a warrior's presence to the international stage. Judo may not be the answer to the economic woes of Russia, but it does have a broad impact on the philosophy of those who practice it.

History shows that the bully who relies on brute force and overwhelming firepower always falls to another empire mightier still. The maturity and poise born of judo practice is an unfailing guide in such matters. A judoka is always in the position to identify his opponent's weakness and bring about a "gentle" victory. The principles of judo thus suggest a world in which global cooperation and exchange among nations can take the place of reliance on weaponry and threats.

If President Putin makes good on his idea to do a judo demonstration at Madison Square Garden, this would be the real thing - politician as martial artist, martial artist as politician. No doubt, he would put some professional wrestlers to shame, but then he would graciously allow himself to be thrown by a precocious American high school judoka. In a judo-oriented realm of politics, the true inner creativity and capacity of the human species may be realized.

I ran across this story of a goofball thief from Pyatigorsk, who at the moment in which he dodges a charge for theft, he goes straight to steal again and gets caught. This unparalleled criminal brilliance and artful practice of daylight robbery surely could not have passed unnoticed by the human resources department at the Kremlin. If they can land him, surely this skillful young man will be handling the next Yukos auction. But, on the other hand, who is to say he would be willing to abandon all his morals to accept such a job.

Cleared of Robbery, Suspect Snatches Judge's Cell Phone

By Carl Schreck,
Staff Writer

A Pyatigorsk man is facing up to four years in prison after he stole the cell phone of a judge at the courthouse where minutes before he had been cleared of charges of stealing a cell phone, a court official said Thursday.

The Pyatigorsk City Court on Tuesday cleared Alexander Kishko of stealing a woman's cell phone at a local clinic after the woman asked the court to drop the case because Kishko had compensated her for damages, court spokesman Astemir Podluzhny said by telephone.

But after leaving the courtroom a free man, Kishko went downstairs, snuck into the office of one of the judges and stole a cell phone, Podluzhny said.

"He was apprehended by one of the court marshals who saw him leaving the judge's chamber," Podluzhny said.

Police in the city in the southern Stavropol region could not be reached for comment.

Podluzhny said Kishko has been charged with robbery -- the same charge he had been cleared of -- and was being held in a detention facility.

In the case that was dropped, Kishko was accused of entering a clinic and attempting to steal a patient's cell phone from a drawer. Security guards caught him red-handed before he left the building, Podluzhny said.

Before he was let go, Kishko admitted to the crime in court and expressed regret over his actions, Regnum.ru reported.

Thousands of crimes have been committed in recent years -- including multiple homicides and arson -- in which authorities say the primary motive was to steal cell phones.

From Reuters best photos of the past 24 hours, residents of a housing development seeking to prevent expansion of a nearby property subversively name a park after President Putin, and plaster his photo everywhere to ensure that development is ground to a halt. If anything, this must be a true measure of a firmly established cult of personality - I suppose if you wanted to have a building swiftly demolished in Russia, you could name it after Bush...

REUTERS/Eduard Korniyenko

A man walks past past a tree bearing a portrait of Russian President Vladimir Putin near a new housing development in the southern Russian city of Stavropol April 11, 2007. Local residents named a grove next to an expanding housing development in Stravopol after Putin and put up his portraits to save the trees from a construction company's axe, Russian media reported. Putin's portrait served as a guarantee for the trees' survival, reported the Izvestia daily quoting residents. The Russian reads: "Grove in the name of V.V. Putin." Picture taken April 11, 2007. (RUSSIA)

The Committee to Protect Journalists is asking for support in an open letter they sent to Vladimir Putin regarding the circumstances of Kommersant journalist Ivan Safronov's death. CPJ has been increasingly assertive in its advocacy for freedom of the press in Russia, and following the murder of Anna Politkovskaya last year, Joel Simon wrote the following in an op/ed: "Putin seems unmoved by international criticism of his country’s human rights record."

Actually, given the news this week, it would seem that the administration is indeed very "moved" by criticism of its human rights record.

CPJ calls on Russian President Putin to investigate Ivan Safronov’s death as murder

April 12, 2007

His Excellency Vladimir Putin
President of the Russian Federation
The Kremlin
Moscow, Russia

Via Facsimile: 011 7 495 206 5137/206 6277

Your Excellency:

The Committee to Protect Journalists (CPJ) calls on you to act on your recent pledge to protect Russia’s press corps by ensuring that Moscow prosecutors thoroughly investigate the death of defense correspondent Ivan Safronov. There is sufficient basis to investigate Safronov’s death as murder, given its circumstances and the sensitivity of his reporting beat.

Safronov, 51, a former Russian Space Force colonel, was a respected military correspondent who covered defense, army and space issues for the independent business daily Kommersant. Just before his death, Safronov confirmed sensitive information about Russian arms sales to Syria and Iran through Belarus. He told Kommersant colleagues he had been “warned” not to publish some of the information.

On March 2, a doctor at a Moscow clinic gave Safronov good news—his ulcer treatment had positive results. Safronov went grocery shopping and took a trolley to go back home. Around 4 p.m., two university students living in a nearby apartment building heard a thud, saw Safronov on the ground, and a window open in an apartment building above him. Safronov’s groceries were on the landing between the fourth and the fifth floor of his apartment building. He died before helped arrived.

The Taganka prosecutor’s office in Moscow immediately said the death was a suicide. Several days later, prosecutors opened a criminal case for “incitement to suicide,” under Article 110 of Russia’s penal code. It suggests Safronov did not voluntarily commit suicide and the maximum penalty is five years in prison.

CPJ research shows that are many reasons why Safronov may have been killed based on information he had been investigating.

• In late February, soon before his death, Safronov had returned from Abu Dhabi, United Arab Emirates, where he had covered the annual International Defense Exhibition and Conference, a gathering of defense manufacturers. Colleagues said Safronov had called the newsroom from Abu Dhabi with information about the sale of Su-30 fighter jets and S-300V anti-aircraft ballistic missiles to Syria and Iran. The sale was channeled through Belarus to conceal their origin and to avoid Western criticism of Moscow for feeding “rogue” states defense technology. Safronov was going to write the story when he returned, but he never did.

• Three days before his death, Safronov privately told colleagues at a news conference he was attending that he had information regarding Russia’s sale of surface-to-air missile system Pantsir-S1, the fighter aircraft MiG-29, and the tactical missile Iskandar-E to Syria. Safronov said he had confirmed that the contract was signed. He said he had been warned not to publish the information because it could cause an international uproar. He was also told the Federal Security Services (FSB) would charge him with disclosing state secrets if he published it. Safronov never said who warned him.

• Safronov had been interrogated many times by the FSB previously for disclosing state secrets in his articles. However, he was never formally charged because each time he was able to prove he had only used public sources. In December 2006, Safronov angered authorities when he wrote about the third consecutive launch failure of the Bulava intercontinental ballistic missile. As a result of his publications, “Safronov really became persona non grata in military circles,” the online newspaper Gazeta reported.

• According to relatives, friends, and colleagues, Safronov had no reason to commit suicide: He had no personal enemies, no debt, and no life-threatening disease. He has been married for a long time with two adult children, and he was expecting his first grandchild.

• The day he died, Safronov talked to colleagues and family on the phone and made plans with them for later that day and for the next week, reported Kommersant, which has launched its own investigation into Safronov’s death.

• Safronov went grocery shopping before allegedly killing himself. He did not leave a suicide note.

Your Excellency, the questions surrounding Ivan Safronov’s death—coupled with his sensitive journalistic beat at Kommersant, information he compiled during his trip to Abu Dhabi, and Russia’s record of impunity in journalist murders—warrant a murder investigation.

Speaking before journalists at your annual press conference in the Kremlin’s Round Hall on February 1, you said the issue of journalist persecution in Russia is “most pressing” and vowed that you “will do everything to protect the press corps.” CPJ, which promotes press freedom worldwide by defending the rights of journalists to report the news without fear of reprisal, calls on you to act on your pledge. We urge you to ensure Moscow prosecutors pursue every lead into Ivan Safronov’s death, including murder for his work, and to conduct a thorough probe in a timely and transparent manner.

We thank you for your attention to this urgent matter and await your response.

Sincerely,

Joel Simon
Executive Director

In today's FT: The Putin strategy is to divide Europe over missile defence

Ms Merkel wants to defuse the issue by passing it to Nato. But senior Christian Democrats voice private anxiety that they are on the wrong side of public opinion. Ms Merkel has invested much in rebuilding relations with Washington. She has eschewed the subservience to Moscow often shown by her SPD predecessor, Gerhard Schröder. But she will find it hard to ignore domestic opinion ahead of big regional elections in 2008.

All this leaves Russia's Vladimir Putin with a broad smile. Mr Putin's foreign policy is shaped by a desire to reverse what he sees as the national humiliation inflicted by Boris Yeltsin's tenure in the Kremlin, a period that saw Russia flirt with the idea of joining the western alliance. The Russian president describes the expansion of Nato during that period as a "provocation". He rejects the idea of institutional links between Moscow and the European Union. Russia must be seen again as a great power, rather than an adjunct of the west.

To that aim, Mr Putin has deployed Russia's oil and gas resources to sow discord among his energy-dependent neighbours. In missile defence, he sees another opportunity to create division.

Scholar Ariel Cohen of the Heritage Foundation puts forward his view on the Russia-led gas cartel. One of his most insightful points is that Russia will likely go about the formation of this group while seeking to prolong the presumption of regularity of its actions, and always strive to appear reasonable and rational.

Map: Economist

From Dr. Cohen:

Moscow is playing a complex and sophisticated game, one that is likely to maximize its advantages as the leading gas producer with the largest reserves on the planet.

First, Russia's approach is gradualist. Moscow has never been openly enthusiastic about a gas cartel but has waited for an opportunity to launch one. Viktor Khristenko, Russia's Vice Premier in charge of energy, rejected the idea just days before President Putin called a gas OPEC "an interesting idea" during his February 2007 visit to Qatar. This past week, however, in Doha, Khristenko said, "We have not, do not have, and will not have the goal of organizing an alliance against anyone."

The message in the Russian media after the summit was that no documents were signed to create a gas cartel—a useful message for Gazprom, the Russian state-owned gas monopoly. But careful examination of the official announcement and media reports reveals that there is reason for concern.

Second, Russia's approach is stealthy. Instead of announcing the cartel prematurely, and spooking consumer countries, it is quietly putting the component parts into place. In Doha, Russia initiated the creation of a "High Level Group" that will "research" the pricing of gas and develop methodologies using commonly accepted gas pricing models. Conveniently, Russia will staff this group.

Third, Russia is able to appear reasonable. The immediate price-regulating function of the emerging cartel is supported by those Latin American countries that want to dispense with market principles in the gas trade: Venezuela, Bolivia and Argentina. With Iran and Venezuela (supported by Bolivia and Argentina) applying their OPEC-honed instincts to gas and demanding price regulation, Russia can afford to stand aside and let others do the talking. Nevertheless, an unnamed "high ranking member of the Russian delegation" to Doha told RIA Novosti that "as the gas market undergoes globalization, certainly such an organization [a gas cartel] will appear and is necessary."

Fourth, and most importantly, a cartel by any other name is still a cartel. Members of the GECF agreed to discuss dividing up the consumer markets between them, particularly in Europe, where Russia and Algeria are major players. For example, if Russia agrees not to challenge Algeria's position in Spain, Algeria will steer clear of Germany. This will clearly challenge the European Union's energy liberalization and gas deregulation policy, which is scheduled to take effect on July 1.

The group members plan to "reach strategic understandings" on export volumes, schedules of deliveries, and the construction of new pipelines. They also plan to jointly explore and develop gas fields and coordinate start-ups and production schedules. To continue their work, members will gather for their next annual meeting in Moscow and plan to create a permanent secretariat. Despite protestations to the contrary, this has all the characteristics of a cartel in the making.

Read the complete article here.

This week La Russophobe is blogging about two pretty interesting articles. One, by Andrei Piontkovsky in the Globe and Mail about Iran and Russia, and the second, a fascinating analytical article by the AEI Fellow Reuel Marc Gerecht titled "A Rogue Intelligence State?"

Here Gerecht notes how the "moral freefall" of the former security officers in change in the Kremlin have translated into Russian business tactics - a connection that not enough people seem to grasp:

There is another Russia-Iran parallel: in Iran it is difficult to separate the truth from frightful falsehoods because there is little transparency in the deliberations of the ruling elite. The result in Iran has been severe ethical corrosion as the regime's disregard for life defines down what is acceptable. The politics of murder have left Iran's political and intellectual classes in a moral freefall, where neither the killers nor the victims are sure of ethical boundaries. Dictatorships need these traditional barriers to keep their worst instincts in check. Russia's moral freefall under Putin has probably weakened the ethical floor that keeps Russia from descending into the horrific domestic practices and immoral foreign policies that characterized the Soviet Union. Litvinenko played a significant role in advancing the story implicating the FSB in the supposedly Chechen bombings of Russian apartment complexes in 1999.[5] Given the ethics of Putin's FSB, one can understand why the organization would have wanted to kill Litvinenko in an especially gruesome way.

This political aggression is mirrored in Russia's business practices. Countries such as Ukraine, Belarus, Georgia, Azerbaijan, and Poland; multinational corporations like Shell; and--indirectly--much of Western Europe have felt Putin's strong-arm tactics in oil and gas, or in his shutting down essential food and export markets.[6] Russia has explored the possibility of creating gas cartels with Iran and Algeria, which, if erected, could wreak considerable economic havoc in Europe.

No comment.

The drumbeat continues in response to the State Dept. report on human rights in Russia - this time the Nashi are spreading the official party line. (see last night's extensive analytical piece on Russian foreign policy).

Over 200 activists protested outside the US embassy in Moscow.

“American mothers, stop the fanatics from the State Department,” one placard read.

Nashi leader Vasily Yakemenko said the United States was causing bloodshed from Iraq to Afghanistan and warned Secretary of State Condoleezza Rice against stirring tensions in Russia.

“If Condoleezza Rice escalates tension here, it’s possible there will be a situation where people here could die too,” he said, suggesting it could trigger public unrest and bloodshed.

“The US needs to think less about what is happening here and more about what is going on in Iraq,” he said.

So let's see here: Yakemenko is threatening that Washington's critique of Russia's lacking democracy could produce bloodshed, while a few days earlier the Kremlin threatens that missile defense in Europe is not needed but "could become a self-fulfilling prophecy." Somewhat similar trains of thought.

The tight-lipped Alexander Medvedev, Deputy Chairman of Gazprom's Management Committee, gives a rare interview with Time Magazine to say that Gazprom may be a monster, but in his view it is a "benevolent monster." The Russian monolith has sure had an awkward courtship with the West (remember the touring hockey team?) - given his shrewd economy with both language and charm, it's almost like bloober reel of dating TV show. Let's hope he doesn't run out of gas before the clumsy goodnight kiss!

Gazprom's anti-competitive tactics are myopic

TIME: One often hears: "What's good for Gazprom is good for Russia."

Medvedev: Not just for Russia — for the world. With the deficit of global energy supplies growing, the fortunes of the global energy very much depend on the state of health of Gazprom as a strong, competitive, unique energy company, which owns unique assets. The better it is for Gazprom, the better it is for the world consumers.

TIME: In February, Russian President Vladimir Putin described as "interesting" the idea of establishing a natural gas equivalent OPEC — a producers' cartel that might control up to 80% of world's natural gas reserves and 40% of natural gas pipe transportation. Last Monday, gas producers met in Qatar. Does Russia seek a leadership role in a gas cartel similar to Saudi Arabia's one in OPEC?

Medvedev: In Qatar, exporters agreed to keep up consultations on how to coordinate their activities. Growing development, production, transportation costs and technological challenges objectively require such consultations. Only Russia, Qatar and Iran have a long-term gas supplying capability. Other producers can only complement these three. Any attempts to diversify natural gas supplies won't amount to more than a three-finger combination. [A Russian equivalent of "not worth a fig"] Nobody has the right to restrict exporters' policy coordination, in which Russia objectively plays the leading role, due to our resources and production. I'm really surprised that consumer countries, the Americans in particular, call this coordination a weapon of blackmail and extortion. This rhetoric is unfounded.

TIME: Gazprom insists on its position as the single owner and operator of Russia's United Gas-Supplying System (UGS). Gazprom denies pipeline access to a handful of independent gas producers who are still left. At the same time, Gazprom talks of market liberalization, and market technologies.

Medvedev: In 1998, six companies had access to the UGS. In 2005, 38 companies did. They — including [oil giant] Lukoil and [the mammoth state-run] Rosneft transported 65 billion cubic meters of gas, that's more than many countries' entire annual production. Gazprom retains its control over the UGS, because it's an immensely complicated organism. Developed in the Soviet Union, it used to incorporate gas-transporting systems of several countries that are members of the Soviet Union no more. One of the mistakes that our so-called "reformers" made was having the UGS sadistically dismembered. Now, Gazprom's attempts to reunify elements of this once integrated system, albeit on the economic rather than political grounds, are of critical importance, irrespective of what countries they are in.

TIME: Gazprom's tough line in recent "price wars" with Russia's immediate neighbors earned it the nickname of "Russia's pipe-line troops." Is Gazprom sensitive to the fact that its drive to reunite the erstwhile Soviet gas transportation system, and acquire gas-transportation and distribution systems in other foreign countries, is seen as an advance of "pipe-line troops" into Europe?

Medvedev: Gazprom's strengthening positions on the world scene couldn't help but cause concern on the part of our competitors who, among other things, have mobilized the public opinion. In reality, all our issues with Ukraine and Belarus pursued the goal of transferring our relations on to a market basis. The time of multi-billion subsidies is gone. There is no politics anymore. Just business. No contract — no gas. Now, we have five-year contracts at least, which only improves security of supplies. As for other countries, if there is an opening to buy assets there, we go for it, just like any other company would.

TIME: What if an outsider tries to buy into your UGS?

Medvedev: We won't sell. You can't compare these situations. Why should we lose the unique system of 150.000 kilometers of gas mains? No other country has anything like that. But our aspirations to buy similar assets elsewhere are explained by our wish to deliver our goods to our customers in the most efficient way.

TIME: Why does Gazprom opposes the idea of separating its production facilities from transporting and marketing operations to improve efficiency, the way they do in Europe?

Medvedev: One of market economy's basics is a producer's ability to deliver his end product to a consumer. Natural gas is basically an end product. To deny the producer the right to deliver this end product is the same as to demand that a car maker deliver cars without wheels, while remaining responsible for car safety.

TIME: Last year, Russia confronted investors of the Shell-led Sakhalin-2 Western consortium with a choice of either surrendering control to Gazprom, or leaving. They surrendered.

Medvedev: In 2005, Gazprom signed a protocol on joining Sakhalin 2 with 25% and one share. Suddenly, they doubled the stock on us. Also, Sakhalin 2 was based on the Production Sharing agreement, with the Russian state reserving the right to decide what expenses are reimbursable. The state doubted the capital expenses they claimed. Also, the consortium failed to meet its ecological safety commitments. The state couldn't ignore that. Personally, I didn't spare time to look into this issue, because I come from Sakhalin. We resumed talks, only once the issues of expenses' compensation and ecological damage had been settled. The state lifted ecological restrictions on the project, once Gazprom stepped in, because we submitted a plan to clear up the damage and make sure that nothing of the kind happens again.

TIME: Foreign investors have been long counting on Russia making 49% of the giant Siberian Shtokman field development available to them. Now, Gazprom remains the 100% developer of Shtokman. Meanwhile, TNK-BP seems to be losing its rich Siberian Kovykta gas field to Gazprom.

Medvedev: Indeed, talks on the 49% foreign entry went on quite long. However, the assets offered by foreign companies were no match to the Shtokman field's resources. Now, we're holding talks with foreign companies on their part in Shtokman's development under a new business model, with Gazprom retaining 100% of the field's resources. As for the Kovykta field, its current developer fails to live up to the approved development schedule.

TIME: Still, Gazprom seeks foreign investment to develop new fields.

Medvedev: Gazprom doesn't have a financial resources' problem to develop its fields. However, we've mastered the world's practice of attracting billions to develop complicated projects and of sharing project risks. We do have a number of major development and production projects with foreign involvement.

TIME: The year 2006 ended in a gas conflict with Belarus that threatened gas supplies to Europe. Any other such conflicts to be expected by the end of this year?

Medvedev: No. At present, the problems with all our transit countries have been taken care of.

The Guardian dedicates yet another front cover story to Russia: Gazprom targets key UK names in drive for expansion

The Russian gas group, Gazprom, is making a determined effort to increase its influence in Britain by targeting landmark buildings as customers. It has started supplying power to York Minster, Headingley cricket ground and the City Point tower in London. Other targets include the National Health Service as it seeks to increase market share in Britain from 2% now to 10% by 2010.

The energy company, whose chairman is Dimitry Medvedev, the first deputy prime minister of Russia and a presidential hopeful, has also stepped up its lobbying efforts in the UK with the appointment of a high-profile public relations executive who successfully sold the concept of new nuclear plants to New Labour.

Lately Russia has been more and more vocal in its rejections of human rights and democracy criticism from other nations, many of which have their own problems in these areas. But is the hypocrisy of some of your critics sufficient to give you a blank moral check?

Sergei Lavrov may see "values" differently than Condoleezza Rice

Granted, Russia’s objections often make a strong point. I’ve always been one of the first to admit that in previous years, before Russia started its tragic backslide, Moscow had gotten a pretty raw deal in some respects from the West. Just six years ago, in the aftermath of 9/11, Putin offered unprecedented access to Russian airfields for the campaign in Afghanistan, a potential opportunity for deeper security cooperation that was quickly squandered by a clumsy U.S. Administration that soon moved forward on NATO expansion. There are a plethora of other examples of hypocrisy and injustice in the West’s relations with Russia, but at no point do any of these facts provide any cover for the steady deconstruction of law, markets, and democracy.

Whatever else we might say, I am one person who understands that Vladimir Putin’s anger in Munich was in no small part based his having been let down in a very personal and political sense by his U.S. initiative.

Yet the Kremlin is extremely talented at weaving these convincing narratives, arguing, sometimes even whining, that Russia is a victim of the double standards of a ruthlessly unfair West. And because of this tragic victimhood, goes the story, Russia is entitled to bend a few rules here and there.

The Kremlin could use a moment of reflection

The Russia-as-victim Narrative is often just a subtle subtext, a natural response you are inclined toward following the official framing of an issue. For example, when Moscow says in regards to the missile defense system “we were never consulted in advance,” “we were deceived,” and announces that Russia has once again regained its “foreign policy independence,” the message that is meant to be understood is that Americans don’t respect us equals, we are lied to as though they think we are weak, and that we should guide our policy toward reasserting our power. Similarly, in defending their conduct in the Khodorkovsky case and the energy imperialism activism by Gazprom, the narrative rather efficiently connects all things open and free with suspicions of sinister economic and market threats from outsiders. Sure, we broke the law to throw Khodorkovsky in the gulag and steal his company, the narrative goes, but he was going to do more business with the West, and take more away from you, the people! Sure, our crackdown on opposition parties and civil society is unconstitutional, but hey, we’re protecting you from evil outside forces that want to rob you blind!

This encouraged paranoia toward free markets and democracy may be in part a Soviet hangover, but make no mistake, those who say that liberty means nothing more than the economic plunder of the Russian people are only making an excuse to destroy rule of law in order to crudely cling to power.

However, given some of the recent, especially truculent reactions from Lavrov and company to U.S. policy, both on democracy and security issues, it looks like the narrative has hit a new climax. One thing seems especially clear to me from the foreign ministry comments this week: Moscow’s increased willingness to ratchet up the tensions with Washington indicates a very real fear of a homegrown “color revolution,” and the rhetorical grounds are already being prepared for an aggressive crackdown on these elements of dissidence (whether the movements have anything to do with Washington will of course be entirely irrelevant). The truculence is not the flexing bicep of oil and gas hubris, but rather an open streak of weakness and panic before the transfer of power.

Russia's greatest fear is a color revolution

The Russia-as-victim Narrative really boils down to a conceptual difference between so-called “values” and “interests” in the articulation of foreign policy. Yesterday Fyodor Lukyanov, editor of Russia in Global Affairs, had a column running in the Moscow Times examining this issue titled “Increasing Supply on the World Values Market.” According to the article, a recent policy report from the Russian Foreign Ministry contained the word “interests” nearly 100 times, yet only contained the word “values” four times, which goes a long way toward explaining how Moscow views values as cultural and historical traits, rather than guiding principals to organize a society and government (hence talking about democratic values can be seen by the Kremlin as a violation of sovereignty – like telling them to make the U.S. Civil War or French literature standard curriculum in schools). As such, the Russia-as-victim Narrative constantly seeks to stake out the position of indignant insult, which is especially aggressively applied to the perceived desire on behalf of the West to impose a suspicious model (parliamentary democracy, freedom of press, what have you) uncomfortably upon Russia.

Despite these real and imagined incongruities, Lukyanov writes that “Sooner or later, Russia’s foreign policy community will come to the conclusion that these notorious 'values' represent an opportunity to pursue our 'interests,' though not because hypocritical rhetoric provides the country with cover for cynical motives.”

I think that too many discussions on values vs. interests in foreign policy are an exercise in rigid reductionism. There is indeed room to talk about a model of foreign policy realism that includes elements of values, which in theory could be applied to the benefit of all. For example last month I held a series of meetings with civil society organizations in Poland, and one colleague brought up the example of a groundbreaking speech that was made just last fall by the Foreign Minister of Japan, Taro Aso, called “The Arc of Freedom and Prosperity.”

Here is what Aso says:

“We are aiming to add a new pillar upon which our policy will revolve.

First of all there is "value oriented diplomacy," which involves placing emphasis on the "universal values" such as democracy, freedom, human rights, the rule of law, and the market economy as we advance our diplomatic endeavors.

And second, there are the successfully budding democracies that line the outer rim of the Eurasian continent, forming an arc. Here Japan wants to design an "arc of freedom and prosperity". Indeed, I believe that we must create just such an arc.

I know that there will be people who hear this and insist that this smacks of a Western approach somehow--that it is unbefitting for Japan, saying, tell the man who looks at home in traditional wooden geta clogs not to go fancying himself dressed up in a Western suitcoat.
So too will there be people saying, when exactly did this country that suffered such a heavy defeat in a war and caused such great adversity both at home and abroad suddenly arrive at such a "virtuous conscience" that it now can lecture to others?

And yet to that I can only reply that it is not normal to insist that the "self" that one sees in the mirror is merely an imitation or a clever invention; what one sees when one looks in the mirror is the real thing.

You can forget everything else you hear today. But Japan is already of age, and what we need is to let go of that way of thinking that makes us squirm when we see our reflection in the mirror. We need to be able to look at it without feeling ill at ease. That is my view on things.”

Aso’s speech, made all the more impressive by the fact that it comes after the Iraq debacle and before the Munich outburst, illustrates the dramatic geopolitical shift occurring in the world today. Contrary to popular belief, this shift is not only about energy. Lavrov himself is fond of saying that the West has lost its monopoly on globalization, yet he and his colleagues don’t yet seem to recognize that they are running out of time to play both sides of the field – the desire to become a global player, and integrate into the world economy at the same time.

Taro Aso has provided a glowing example to all, because unlike the Ostpolitik of Germany’s SPD, or the pandering of Romano Prodi to Russia at the insistence of Italy’s energy kings, the Arc of Peace and Prosperity recognizes that values ARE interests in foreign policy, and despite being 100% dependent on oil and gas imports, Japan will not ignore its beliefs in markets and democracy for a quick deal.

The Russia-as-victim Narrative largely functions because Moscow has been able to successfully divorce international democratic values from national interest, because its has firmly bonded ideas of Western-like models of government and economy to economic exploitation, and because the West has morally failed the reformers within the Kremlin, both with clumsy faux pax and the shameless abandon of values to get a better oil or gas deal than their neighbor. No wonder so many hardliners in Moscow don’t believe in the relevance of values.

Russia, like Japan, also has a complicated historical reckoning to get through, and one day it too will have to look in the mirror and be comfortable with what it sees. The moment in which Russia is prepared change directions, and recognize that values are the most effective way to pursue interests, is a moment that I hope to one day see.

A major article on European energy security in this week's Economist:

Art by Kevin Kallaugher, Economist

The Soviet Union relied on its military machine for geopolitical power: its oil and gas were just a way to pay for it. In today's Russia, energy is itself the tool of influence. To use it the Kremlin needs three things: control over Russian energy reserves and production, control over the pipelines snaking across its territory and that of its neighbours, and long-term contracts with European customers that are hard to break. All three are in place. For all the talk of a common strategy towards Russia, the EU is divided and stuck for an answer.

Gazprom, Russia's energy giant, cherished by Mr Putin as a “powerful lever of economic and political influence in the world”, has long-term supply contracts with most European countries, including France, Germany, Italy and Austria. It also has direct access to these countries' domestic markets. The EU reckons that half its gas imports now come from Russia. Newer EU members, such as Hungary and the Czech Republic, are almost entirely dependent on Russian gas. Moreover, a pipeline network that it inherited from the Soviet Union gives Russia control over gas imported from Central Asia.

The EU has few ideas for how to deal with its chief energy supplier. “We know we should do something about Russia, but we don't know what,” one Brussels official says. “In the EU we negotiate on the rules, whereas Russia wants to do deals.” The deals are coming thick and fast. Last month, Russia secured one to build an oil pipeline from Bulgaria to Greece that will bypass the Bosporus. Symbolically, it will be the first Russian-controlled pipeline on EU territory. The pipeline will carry Russian and Central Asian oil straight to the EU, avoiding Turkey.
...
The European Commission has been urging EU members to break up their vertically integrated energy companies, but France and Germany are resisting. The problem, says the commission, is that national governments do not understand the link between liberalisation and greater energy security. “New member states equate security with nationalism. But the only alternative to integration is isolation,” says one senior EU official.

At the most recent EU summit in Brussels, heads of governments pledged to separate their energy supply and production activities from transport networks, which will be managed independently. This falls short of an ownership break-up but it should increase competition. EU leaders accepted the need to link their energy networks, allowing more cross-border trade and thus both boosting competition and reducing Gazprom's power. Europe is also talking of building more LNG terminals that can be stocked by other suppliers.
...
As Mr Putin contemplates a gas OPEC, he should remember that although the 1973 OPEC oil shock extended the life of the Soviet regime, it also left a Russian economy trailing behind its Western peers. “Basing national power and prosperity on an inadequate monoculture is as risky as basing them on rockets in the cold war,” argues Sir Rodric Braithwaite. Still, Russia's ability to cause harm to itself and to others in the cause of proving its greatness should never be underestimated.

The Land Where You Sit: It’s getting warmer in Chita…

By Grigory Pasko, journalist

On this visit, Chita met me with bright springtime sunshine, a cold wind, and a mass of policemen standing in the same places as on previous visits: next to the Oblast procuracy, on the squares, in the vicinity the Ingodinsky Districy Court, and at the start of the small side street leading to the investigative isolator. Naturally: the Ingodinsky District Court had adopted a decision that Chita’s most high-profile prisoner, Mikhail Khodorkovsky, would remain in these historical places of banishment at least until the beginning of July of this year.

Photo of Chita isolator prison from the other side by Grigory Pasko

I was finally able to see with my very own eyes this time how the prisoners Khodorkovsky and Lebedev were delivered to the Oblast procuracy. At first, a police car drove out of the gates of the investigative isolator. Right behind it, a «gazelle» (a kind of microbus assembled in Russia—G.P.) with flashing lights on the roof, after it a «zhiguli» [a small Russian car known as a Lada abroad—Trans.] with a blue police stripe and flashing lights. Then, yet another «gazelle» and yet another «zhiguli» with flashing lights. As the local taxi drivers say, there’s only one other person in Russia who is driven around with such pomp and such precautionary measures – president Putin.

Unfortunately, the procession moved so quickly that I was unable to photograph this “tactical military operation”. But instead I got to “admire” the view of the Chita SIZO isolator to my heart’s content (see above photo).

Everywhere I looked, it was clear that Chita was weary of winter already and couldn’t wait for the warmth and the sun. Despite the bone-chilling wind, the girls on the streets were already wearing short jackets instead of ankle-length winter coats. And nearly all of them were not wearing anything on their heads.

The small groups of policemen scattered here and there all over the city were no longer stamping their booted feet against each other to keep warm, but were calmly warming themselves in the as yet ungenerous sun. They were having a lively discussion about something. Maybe about how bored they are of protecting Khodorkovsky from who knows what. Or maybe they were discussing the results of the work of a Ministry of Internal Affairs of Russia commission, which had recently completed work in Chita Oblast. The commission, headed by the chief inspector of the MVD, major-general of the police Anatoly Bakayev, had examined the work of the Trans-Baikal police over the past 5 years. According to reports in the local mass media, command-headquarters training on freeing hostages was conducted within the framework of the examination, and the ability of the actions of the staff under extraordinary circumstances and upon the announcement of a signal on full mobilizational preparedness was tested. Representatives of the MVD commission noted a huge quantity of comments on the work of the Trans-Baikal policemen. Shortcomings were uncovered in the activities of the patrol-and-post service, precinct officers, workers of the GIBDD [road police—Trans.], and temporary detention isolators. In the opinion of general Bakayev, a complex state of affairs is being observed in the Central Rayon of Chita and in certain Rayons of the Oblast.

It would be interesting to know just what the general meant by “complex state of affairs”. Most likely the idiotism of his colleagues, who, when delivering just two prisoners from one building to another right nearby, actually contrive to bring traffic to a halt in practically the entire city.

Chita is living an interesting life. On the footsteps of the «Privoz» restaurant, a new hotel has recently opened its doors – the «Vizit». Certain things about it are simply mindboggling. For example, a guest in one of the rooms pulled the plug of his TV set out from the wall. It turned out that all the televisions in all the rooms stopped working, because the images on their screens depended on this one plug.

Photo of city view from the window of the brand new hotel by Grigory Pasko

I saw small sheets of paper with announcements on them glued to one of the tables. One sheet offered the building of peasant stoves, another the installation of satellite antennas. The first ad had all the phone numbers ripped off; the other had them all intact. An eloquent fact in and of itself, in my opinion.

Another exciting event in my time in the city was when one man discovered an anti-tank mine right in the middle of the road. He first removed it from the roadway by himself, and only then reported his find to the police. The assumption is that the military – of which there is a great deal in these parts – had simply lost it by accident.

And a word about the military. There are persistent rumors going around in Chita that the Chinese have massed a tank regiment on the Russian-Chinese border in the event of the freeing of… Khodorkovsky. The rumor is idiotic, of course, but that is precisely the reason for its long life.

How the snowdrops after winter creep out into the light and other stories. For example: Recently, the acting director-general of the open joint-stock company “Airport Chita” appealed to the Chita transport procuracy in connection with the sale of 38 brake discs.

A check had established that the chief engineer of this enterprise, Valery Selin, had in January-February 2007 unlawfully sold the brake discs to the open joint-stock companies “Aviaresource”, “Aviaprompostavka” and “DeltaFly”, situated in the city of Moscow. The proceeds he spent, having caused material damages to OAO “Airport Chita” in an overall sum of 38 thousand rubles.

From this report I understood that Chitan airplanes won’t have anything to brake with when landing. And so, to those readers who are thinking of flying to Chita, I suggest that you bring your own brake discs.

Photo of a Chita resident who just might live to see democracy by Grigory Pasko

…Before I flew out, the hotel manager said to me: “This isn’t the first time I’m seeing you here. And what is it that has so caught your fancy in this large forgotten city?”

I replied that I would like to see in Chita the blooming not only of the wild rosemary, but of freedom and democracy as well.

The woman looked at me as if though I were insane.

From President Vladimir Putin's speech yesterday at Novo-Ogaryovo concerning the reforms to made to Russian Railways, one of the largest state-owned rail transport companies in the world (as most travelers to Russia, myself included, have to come to know very well).

President Putin:

The success of our investment policy will depend on the effectiveness of the future model of the transport services market. And we now need to establish conditions that promote normal competition in the various spheres of the railway business. First and foremost we must do so with respect to transportation activities, traction power, and by providing maintenance repair services in equitable conditions. And of course a great deal depends on the decision the cabinet makes about how to further reform Russian Railways. This is very important. And if we create some kind of monster that smothers competition then we will not create any kind of market here.

I'm glad to know that Putin is against creating state-owned monsters.

Call it "Cold War Wednesday" if you like, but today the Guardian also dedicated their front page to a long feature article carrying the headline "Russia threatening new cold war over missile defence."

In an interview with the Guardian, the Kremlin's chief spokesman, Dmitry Peskov, said Moscow felt betrayed by the Pentagon's move. "We were extremely concerned and disappointed. We were never informed in advance about these plans. It brings tremendous change to the strategic balance in Europe, and to the world's strategic stability."

He added: "We feel ourselves deceived. Potentially we will have to create alternatives to this but with low cost and higher efficiency." Any response would be within "existing technologies", he said. As well as military counter-measures, Russia's president, Vladimir Putin, also wanted "dialogue" and "negotiations", he added.
...
The same day Russia ruled out cooperating with the US over the shield. "Despite certain signals received in recent days from the US side ... I see no political foundation for it," said Sergei Ryabkov, a foreign ministry spokesman. Moscow now had little choice but to take the bases "into account in our strategic planning", he said.

Analysts said there was a common feeling in Russia that the US had reneged on an agreement after the collapse of the Soviet Union to abandon cold war politics. "Cold war thinking has prevailed, especially on the western side," Yevgeny Myasnikov, a senior research scientist at Moscow's Centre for Arms Control, told the Guardian. "Russia has been deeply disappointed by what has happened after 1991. Nato started to expand, and the US started to think it had won the cold war. We had hoped for a partnership. But it didn't happen."

Today David Ignatius reviews the new book "Spy Wars" by former CIA officer Tennent H. Bagley, the man in charge of handling the famed KGB turncoat Yuri Nosenko (most recently resurrected in the film The Good Shepherd - although he did not actually commit suicide, and was made famous for talking about Lee Harvey Oswald, which will probably make this book very popular among a certain brand of conspiracy nuts).

Bagley's book, "Spy Wars," should reopen the Nosenko case. He has gathered strong evidence that the Russian defector could not have been who he initially said he was; that he could not have reviewed the Oswald file; that his claims about how the KGB discovered the identities of two CIA moles in Moscow could not have been right. According to Bagley, even Nosenko eventually admitted that some of what he had told the CIA was false.

What larger purpose did the deception serve? Bagley argues that the KGB's real game was to steer the CIA away from realizing that the Russians had recruited one American code clerk in Moscow in 1949 and perhaps two others later on. The KGB may also have hoped to protect an early (and to this day undiscovered) mole inside the CIA.

Take a stroll with Bagley down paranoia lane and you are reminded just how good the Russians are at the three-dimensional chess game of intelligence. For a century, their spies have created entire networks of illusion -- phony dissident movements, fake spy services -- to condition the desired response.

Reading Bagley's book, I could not help thinking: What mind games are the Russians playing with us today?

Recently a new energy report in the Russian Analytical Digest series was published by the respected International Relations and Security Network (ISN ETH Zurick), a very high quality online information source which I frequently read. One of the articles, written by the analyst Matteo Fachinotti, gives the following brief quotation from this blog:

The media has hyped the idea of a new gas OPEC which could menace the European Union with the spectre of even higher prices for natural gas. This speculation has little to do with reality however. Numerous obstacles will prevent the formation of such a global cartel. Nevertheless, other types of producer alliances may be possible and these deserve careful attention.

Rhetoric Currently Exceeds Reality

“Europe, the U.S., and Asia should be doing everything possible to prepare for the possible future of a natural gas cartel. Gazprom is already actively engaged in anti-competitive policies to pre-empt, disaggregate, and coordinate the energy market.” This warning from Robert Amsterdam, a former legal counsel to Yukos, is an example of a recent trend in the Western media portraying the threat of a gas cartel led by Russia as the next step in Russia’s attempt to control energy flows to Europe. This interpretation is exaggerated.

While I am flattered that my content has marginally become part of the dialogue at ISN, Fachinotti's out-of-context quotation was nevertheless surprising to me for a number of reasons, not least because he has mistaken me to be both a member of the media and a former lawyer to Yukos (I am a current attorney to Mikhail Khodorkovsky, among other international clients).

Does Russian gas benefit from Iran's nuclear obsession?

Most immediately surprising is the argument that the media has over-hyped this threat. It seems to me to be quite the contrary. The overwhelming majority of the coverage of the Doha meetings of the GECF has been more soothing to the nervous importers than a dose of valium and a massage - even as the group unanimously voted to form the pricing group yesterday, copy editors couldn't seem to grasp all the doublespeak to even write a headline. For example, yeserday on Businessweek.com, these two separate headlines were simultaneously running: "Why a Gas Cartel Could Be a Bust" and "Gas exporters to form group on pricing." Is that not a little bit of an embarrassment, or at least confusing?

But in general, most of the business press has thoroughly rejected the gas cartel idea. The Financial Times ran stories titled "Gas cartel might not be in pipeline" and "Little brother is unlikely to bully gas importers," the Economist chimed in with "A gas OPEC: Don't worry, there won't be an effective gas cartel," and the AP ran the story "Natural gas cartel would be tough to achieve, experts say" and "Energy ministers nix natural-gas cartel" among hundreds of other stories. Let's not forget that our guest blogger and resident energy expert Derek Brower called the gas OPEC a bluff back on February 11th.

So given the alarming news of the natural gas pricing committee yesterday, how could so many highly respected news sources get it wrong? Answer: actually, they generally got it right, and so did Matteo Fachinotti of ISN for the most part. I have never tried to argue that it would be feasible for gas exporters to influence prices anytime soon, especially of pipeline-delivered gas, I just argue that these meetings of natural gas exporters raise legitimate supply concerns in terms of competition that not many other sources are covering. It's a mystery to me why ISN didn't use the first part of my statement:

"My entire point here is that too many analysts are over-reacting to the James-Bond-like conspiracy theory of "Gasfinger" and failing to address the fundamental issues at stake."

Or even a more recent comment, which is more illustrative of my issue with the gas cartel:

We are missing the point by concentrating only on prices, short-term impact, and a perception of collective interests on behalf of the exporters. The potential threat of the gas cartel is not on its immediate ability to influence prices - the analysts are 100% correct on this one - it has much more to do with a situation of coordination, creating a rapidly diminishing environment for competition bordering on market failure. Agreements between the top three to five gas exporters is already leading to a carve up of the markets. Call it what you want, but it is already happening.

The activities of pre-emption and market coordination carried out by Russia can happen both within and outside of the structure of a gas OPEC-like organization, which is something the ISN report seems to grasp:

Another idea proposed by Vladimir Putin is more straightforward bilateral coordination on energy projects. In this respect, Russia’s current deal with Algeria might have a particular significance. The agreement provides for a swap of upstream assets between Sonatrach and Gazprom, as well as possibilities for Gazprom to play a role in the distribution and marketing of Algerian gas to Europe. The source of potential worry for Europe, which views Algeria as an important component of its diversification strategy in gas imports, is not so much the creation of a full-fl edged gas cartel. It is, rather, the fact that Algeria has a large outstanding debt to Russia related to recent large weapons purchases, which may weaken its ability to push ahead with projects that are not in Russia’s interest. Indeed, Algeria’s bilateral agreements in the economic and military spheres taken together put Russia in a position where it might be able to exert significant influence in order to prevent projects that compete with its own plans. Russia has a history of such practices: one example is the agreement between Russia and Turkmenistan, which allows Russia to purchase virtually all Turkmen gas until 2028 at a comparatively high price, in effect preventing the construction of any infrastructure projects linking Turkmenistan more closely to China.

I don't there that there is strong disagreement here, just rather the fear of the C-word and all its implications. OK fine, let's not call it a cartel. Coming soon: Happy birthday, GPEC!!!

Shortly following some optimistic announcements from Russian officials that WTO negotiations are swiftly progressing, the United States Trade Rep. Susan Schwab put an end to the party with some rather less hopeful words: "The question that I get asked when it comes to Jackson-Vanik and permanent normal trade relations with Russia is, is the WTO ready to let Russia in and the answer is, 'not yet.'"

US Trade Rep Susan Schwab dedicated yesterday's press conference to doing a hatchet job on China on behalf of Hollywood, but let slip some devastating comments for Russia.

The comment provoked a swift response from Russia:

Sergei Prikhodko told a RIA Novosti press conference that the results Russia has achieved in certain sectors testify that it is not lagging behind dozens of other WTO member states.

"And in this connection, such a statement, which demands clarification, arouses certain questions," he said.

Jackson-Vanik (JV) has long been an unfortunate sticking point in US-Russian trade relations, and it has always been the contention of this blog that it should be abolished, and those supporting rule of law in Russia should encourage the country's admission into the WTO in order to create greater integration into international systems of laws, rules, and procedures.

Efforts by the U.S. government to throw obstacles in the path of Russia's rise to become an equitable trade partner, bound by the same rules and laws as everyone else, not only undermines Western interests, but also is seen as bitterly hypocritical conduct in Russia. It is time to recognize that openly hypocritical policy toward Russia, be it in business, trade, or human rights, is something that is actively utilized by the Kremlin to give the appearance of legitimacy to their absurd arguments of the "unjust victimhood" of Russia to the West as an explanation for autocracy (otherwise known in shorthand as "sovereign democracy"). We continue to assert that JV is retrograde and unnecessarily punitive, and given the necessity of Russia returning to the rule of law and opening itself up to market economics, providing the ruling junta in the Kremlin with legitimate reasons to portray themselves as victims makes absolutely no sense.

So the question remains: was the point of Susan Schwab's dithering on Jackson-Vanik and WTO to achieve some progress on Russia's support of Iranian nuclear aspirations? If that were the case, the threats seemed to have achieved remarkably little beyond a brief denial of Iran's claimed capabilities. It seems that other points of pressure would be more fruitful in producing a more favorable Russian policy on Iran.

Are there other issues behind the WTO negotiation delays? Konstantin Kozlov of the Center for Finance and Economic Research speculated that it is because the negotiations are shrouded in secrecy:

"The impression one gets is that the government is deliberately delaying accession until after the elections," Kozlov said. "The process of negotiation has been secretive, and Russia is provoking changes in the rules of the game by not stating unequivocally what it wants."

Sounds like another unfortunate clash between German Gref and the hardliners.

From Vladimir Socor on Eurasia Daily Monitor:

Convening in Doha, Qatar on April 9, the Gas-Exporting Countries’ Forum (GECF) has taken a first step toward creating an exporters’ cartel at the intergovernmental level. However, the Western gas-exporting countries -- Canada, Norway, and the Netherlands -- oppose this initiative, as does Azerbaijan; while Qatar’s ultimate position seems uncertain (it had to show even-handedness as host and chair of this meeting). The Central Asian gas-exporting countries may be corralled against their will into an anti-Western cartel via Russia, unless the West gives Kazakhstan, Turkmenistan, and Uzbekistan another choice.

In deliberations behind closed doors, GECF decided unanimously to set up a High-Level Group that would develop a common methodology on the formation of gas export prices and conduct research on consumer markets. The High-Level Group, consisting of deputy ministers or departmental directors, shall discuss relevant proposals from member governments in six meetings during the remainder of 2007, then present its results for possible decisions at GECF’s meeting next year.

Last Thursday, the Bureau of Democracy, Human Rights and Labor of the US State Dept. released a new report titled Supporting Human Rights and Democracy: The U.S. Record 2006. To give you an idea of how Russia was addressed in this report, the opening to the Europe and Eurasia section quotes Anna Politkovskaya - "How could I live with myself if I didn’t write the truth?". The full text of the report can be read here.

Some Duma members are furious over the latest State Dept. report, which heavily features Anna Politkovskaya

Today, RIA reported that Konstantin Kosachev has issued a statement in response, accusing Washington of intending to violate Russian sovereignty in the upcoming elections.

"The report contains a direct indication that the United States intends to finance projects within the framework of the forthcoming State Duma and presidential election campaigns," said Konstantin Kosachev, the head of the International Affairs Committee in the lower house of the Russian parliament. ...

"Although the State Department report seems to deal with another topic, it nevertheless contains an acknowledgment that such facts have been, still exist and are planned in the future," Kosachev said. "That is obvious interference in the internal political life and sovereign affairs of another country, which we cannot accept under any circumstances."

In the Sunday Observer, former Yukos VP Alexander Temerko published a column on the possibility of a Russia-led gas cartel. Despite repeated denials from officials attending the Doha meetings that any such group would be performed, even before the first day of meetings was completed there was already news that an exploratory committee would be formed to investigate prices. For some reason, copy editors are finding this to be a very difficult story to write a headline for.

Temerko in the Sunday Observer:

Now a newly confident Russian political elite is seeking to play an active role in global politics. Energy is considered one of the main tools for its comeback as a superpower.

Reinforcing this are the needs of the Russian gas monopoly Gazprom. Its biggest fields are in the declining production phase. To launch new fields it needs multi-billion-dollar investments. At the same time, it faces mounting costs to maintain its pipeline infrastructure. The future price of gas will be influenced by the rate of return on massive investments in exploration and production over the next five to seven years.

Gazprom's motto is 'We only start producing gas that has already been sold' and it will not develop new fields without first signing long-term contracts. And these must guarantee Gazprom a price high enough to cover not only its own expenses, but also the financing it provides to various of the Kremlin's political projects.

I believe Moscow has already decided and a gas production cartel is inevitable. The only questions to be decided are: Who (else) will join, what parts of the European market must Russia concede to get them to do so, and how exactly - and publicly - will the new organisation function? It will differ from Opec, an organization of oil producers designed to serve their own interests in a highly volatile global oil market. The main tool at their disposal is a flexible system of quotas, which raises or decreases oil supplies to the market. In the gas industry, the tap can't be turned on or off casually.

The European gas market is based on contracts of up to 20 years or more and is already characterised by Gazprom's leading role as a supplier. Currently it supplies almost 40 per cent of European gas consumption with 21 countries buying Russian gas.

Revolution Square Rises Up for Khodorkovsky

Picket in support of Khodorkovsky in Chita was noticeable only thanks to a massive police presence

By Grigory Pasko, journalist

Mikhail Khodorkovsky’s lawyer, Chairman of the Russian Committee of Lawyers in Defense of Human Rights, Yuri Schmidt said in a recent interview with radio «Liberty»: “If twice as many people come to a new ‘March of Those Who Disagree’ than to the previous one, and another twice as many to the next one, the power will realize at last that the time has come to pack up its credit cards and stuff and quickly get going, to the Maldives or wherever, someplace where it has its own property. Otherwise, truly, things will be bad for it…”

Photo of Chita’s Revolution Square by Grigory Pasko

Back in Soviet times, I often heard the phrase: you can’t beat the state. And if you try, then it will break you and trample you. Those who said these things no doubt had in mind people who acted individually: these, the state did indeed trample on and send off to faraway camps.

But here’s a fact: opposition to the state did not stop! There was only a small handful of dissidents, and yet the totalitarian state – the USSR – with its gigantic mechanism of repression – the KGB – crumbled nevertheless.

Today, Russia is returning to totalitarianism, and to the almightiness of the KGB.

And once again there are small handfuls of people who are trying to oppose this evil. There aren’t many of them. But they do exist.

The policemen began to appear on Revolution Square long before the start of the picket in support of Mikhail Khodorkovsky in Chita. Interestingly, they appeared simultaneously from all corners of the square. You could see from the expressions on their faces that they were in an easy-going and good-natured mood. If you didn’t know what the police have become in the times of Putin, you could even think that they might be supporters of the picket participants. Or at least sympathizers.

Photo of picket on Revolution Square in Chita by Grigory Pasko

Among the participants in the picket, I immediately recognized Marina Savateyeva, Oleg Kuznetsov, Igor Linnik, Tatiana Maltseva, Marina Sukhinina, and former priest Sergey Taratukhin.

The picket participants arrived precisely at the designated time. They set up a table with books and cards. They unfurled their banners. Almost instantly, a young person with closely cropped hair appeared and began to bustle around them. In his hands he held a portable video camera. He used it to slowly photograph the faces of the people – and not only of the participants in the picket, but also of those who came up to it.

I asked the young man who he might be? He remained as silent as a fish. Marina Savateyeva explained: this is an employee of the local administration of internal affairs; every rally participant and picketer of the city of Chita has known who he is for a long time already.

Photo of picket on Revolution Square in Chita by Grigory Pasko

At 4 PM local time, fifteen of the picket participants unfurled two five-meter banners on Revolution Square: “The Khodorkovsky case is a shameful farce of made-to-order justice” and “Freedom for Mikhail Khodorkovsky and Platon Lebedev”. The picket participants gave out statements by Mikhail Khodorkovsky and Platon Lebedev to passers-by, along with materials about their social and educational projects.

The picket continued for about two hours. The police stayed calm. This time. The last time Savvateyeva and Maltseva had come out on the square, in February, provocateurs attached themselves to them, and the picketing was aborted. Then there were court sessions at which the participants in the supposedly “illegal” picket had been acquitted.

This time, the Chita authorities permitted the conducting of the picket on Revolution Square. This square is practically on the very edge of the city (sort of like Chita itself is practically on the very edge of the country). So there weren’t very many people around who felt for the picket participants and for Mikhail Khodorkovsky.

It is noteworthy that the support committee participants had indicated another location – the Square Named After Lenin – in their notification on the conducting of the picket in support of Khodorkovsky and Lebedev. However, city hall came back with the following reply – and I quote: “in the period from 12 to 18 o’clock on the Square Named After Lenin, the UVD [Administration of Internal Affairs—Trans.] for Chita Oblast in conjunction with the committee of professional education, science, and youth policy of the administration of Chita Oblast” will be conducting an action “For a healthy lifestyle”.

So, the organizers of the picket were forced to agree with city hall’s proposal to move the conducting of the picket to Revolution Square.

It’s hard to say if anyone was actually fighting “for a healthy lifestyle” on the Square Named After Lenin at this time: there are always a lot of people there. But we do know that soon after the “struggle” of the local authorities with an unhealthy lifestyle, reports appeared in the Russian mass media about how deaths by poisoning from drinking counterfeit vodka appeared to be on the rise once again in Chita. By the way, the press was already reporting several months ago about an increase in crimes committed while under the influence of alcohol in Chita Oblast. As an example, more than 90 thousand statements, reports, and other information about incidents were received by the Chita Oblast organs of internal affairs, of which more than 25 thousand were registered as crimes.

Photo of the Ingodinsky Court of Chita by Grigory Pasko

…Several days after the picket, it became known that the Ingodinsky District Court of Chita had extended Mikhail Khodorkovsky’s term of confinement in the local investigative isolator until 2 July of the current year. Earlier, Khodorkovsky’s and Lebedev’s lawyers had likewise protested their clients’ transfer to Chita – in the Basmanny Court of Moscow, which had refused to satisfy the complaint. Together with this, on 20 March, that same Basmanny Court ruled that the conducting of the new preliminary investigation with respect to Khodorkovsky and Lebedev in Chita had been illegal, because this procedure should have been conducted at the place where the crime was committed, i.e. in Moscow. On 22 March, the Procuracy-General of Russia appealed this decision in the Moscow City Court, and it can not enter into force until the appeal has been heard. In the opinion of observers of the lengthy process of the unlawful persecution of the YUKOS managers, it is perfectly likely that the court session on the new charges addressed at Khodorkovsky and Lebedev may take place in Chita as well.

I wanted to take the opportunity to introduce all of my readers to what I consider to be one of the more important anti-corruption NGOs currently operating in Europe, Global Witness. I have had some very positive contact with this organization, and I highly recommend visiting their website and checking out some of their reports for high quality information on the role of the natural resources trade in international conflict and corruption.

Below I attach the beginning of a summary introduction of last year's report "It's a Gas. Funny Business in the Turkmen-Ukraine Gas Trade." I strongly support GW's calls for greater transparency and corporate governance in the energy trade.

Summary

This is the story of a trade that brings natural gas from the Central Asian country of Turkmenistan through Russia and Ukraine to the European Union (EU). Far from being open to scrutiny by the citizens of these countries, this trade has long been controlled by a handful of people and a series of mysterious intermediary companies. Although the business is worth billions of dollars a year, it is still unclear where much of this money goes. The EU is increasingly reliant on gas supplies from the former Soviet Union. The gas price dispute between Russia and Ukraine in the winter of 2005/6 sent shivers of anxiety across Europe that, in the depths of winter, the continent might not get enough fuel to keep warm and power its industries. Yet the dependence of EU countries on gas from Russia and Central Asia is only likely to grow. This report poses a difficult question for the EU and its neighbours: can they meet their energy needs without funding corruption and undermining good governance in the countries that supply or transport this energy? The time has come for transparency in the natural gas trade, to the benefit of citizens across the region.

The dictator and Deutsche Bank

The story starts in the Central Asian country of Turkmenistan, a former Soviet republic that is crumbling under the tyranny of its president, Saparmurat Niyazov. Turkmenistan is thought to earn more than US$2 billion per year from natural gas but its citizens have no information as to where that money is going because the revenues are managed in a completely opaque way. It is clear that the money is not being spent on them: standards of health, education and living quality have plummeted since independence in 1991. Political freedom is non-existent, censorship is total and over half the population is unemployed. Despite its gas wealth, Turkmenistan’s citizens are worse off than in Soviet times.

Global Witness has discovered that President Niyazov keeps most of the gas revenues under his effective control in overseas and off-budget funds. Indeed, a horrifying 75% of the state’s spending also appears to take place off-budget. Global Witness has received several credible estimates that the total money under Niyazov’s control and held overseas is likely to exceed US$3 billion, some US$2 billion of which appears to reside in the Foreign Exchange Reserve Fund (FERF) at Deutsche Bank in Germany.

Global Witness has discovered that, according to a 2001 contract, gas revenues from 2002 to 2006 were intended to be paid into Central Bank of Turkmenistan account no. 949924500 at Deutsche Bank, Frankfurt, but little else can be determined about exactly how Niyazov is managing Turkmenistan’s money. Most worrying of all, it seems that no money from the sale of Turkmen gas even makes it into the national budget.

Niyazov appears to use these revenues to fund an increasingly bizarre personality cult replete with golden statues and lavish palaces. His picture is everywhere in Turkmenistan: on public buildings, on packets of salt and tea, bottles of vodka and even floats eerily in the corner of television broadcasts. ‘Turkmenbashi the Great’ (Niyazov’s appointed name, meaning ‘the great leader of the Turkmen’) has gone as far as to rename days and months of the calendar in an attempt to assert his hold over the Turkmen psyche. Schoolchildren are compelled to study his spiritual book, the Rukhnama, which is described on its official website as being ‘on par with the Bible and the Koran’.

Click here to read more.

From the AP: Putin is always right, says Russia elections chief

MOSCOW – The Russian official whose role is to act as an impartial umpire in elections said in an interview published on Monday that President Vladimir Putin is always right.

Kremlin critics have raised doubts about the impartiality of Vladimir Churov, a former colleague of Putin's who was last month chosen as chairman of the Central Election Commission.

In his first major newspaper interview since he started his new job, Churov told the Kommersant daily that 'Churov's Law No. 1' is that Putin is always right.

Asked by the newspaper what would happen if it turned out the Russian leader was mistaken on a certain issue, Churov said: 'How can Putin be wrong?'

Loyal readers may recall a critical article we recently posted by the talented academic Janusz Bugajski, which argued that Russian energy imperialism uses a strategy of targeted disaggregation, especially focusing on new EU member states in critical geographic positions:

"The Kremlin not only manipulates divisions between older and newer members. It also aims to forestall any common policy among EU newcomers. Hungary and Bulgaria have become the primary targets among former Soviet satellites. The Kremlin is capitalizing on long-standing personal connections with Socialist officials in these countries to construct pipelines and distribution points that will pre-empt Europe's energy diversification."

Bulgarian PM Sergei Stanishev and Vladimir Putin

As news developments are showing this week, it seems Bugajski hit the nail right on the head. Last week, Alexei Miller of Gazprom led a large delegation to Bulgaria and held numerous high level meetings, including some face time with Prime Minister Sergey Stanishev, to discuss major energy projects. Bulgaria has also recently signed an agreement with Greece and Russia to build the Burgas-Alexandrupolis Pipeline (BAP), which will end the Turkish stranglehold on the Bosporus Strait (one of the world's major chokepoints), causing some critics to cry foul that Russia is undermining Turkey's role as a transit country.

The fall out in Hungary over the socialists' agreement to support the extension of the Blue Stream pipeline is also beginning to heat up, and has put the government on the defensive. Viktor Orban, leader of the opposition party Fidesz, has dramatically compared Ferenc Gyurcsány's administration's warm relations with Russia with a submission to communism:

"Those young people following us should not allow Hungary to become Gazprom's most cheerful barracks after we freed ourselves from the fate of being the Soviet system's most cheerful barracks," Orban said in a speech to mark his party's 19th anniversary.

"The Fidesz generation is sending a message: we did not show the door ... to the Russians, to the Soviet Union, to communism only for them to climb back in the window," he continued. "Oil may come from the east, but freedom always comes from the west."

Gazprom's "most cheerful barracks" in Hungary and Bulgaria may prevent alternative pipeline proposals (such as Nabucco or Baku-Samsun-Ceyhan) which would help Europe diversify off Russian oil and gas.

Hungary's Socialists aren't taking this criticism lying down though, and in statements made to the FT and other media sources they argue that indeed Nabucco is still supported, and that, in fact, it is resolutely hypocritical to solely blame Hungary for the lack of a common EU energy policy toward Russia. After recent decisions made by Italy and Germany, I'm afraid that I thoroughly agree with the painful truth of that latter statement.

In interviews last week, senior government officials in Budapest expressed surprise that Hungary had been widely accused of undermining Europe's energy security by signalling its interest in Blue Stream II, a Russian-backed pipeline that would bring Russian gas from Turkey to Hungary.

In international press reports, unnamed officials from Brussels to Turkey have worried that Hungary's backing