A New Project of Eurasian Integration – A Future Appearing Today

In January 1st, 2012 begins the Common Economic Space of Russia, Belarus and Kazakhstan. Vladimir Putin shares his thoughts on these integrative processes in this exclusive article for Izvestia.

Come January 1st, 2012, a critical integration project will begin – the Common Economic Space of Russia, Belarus, and Kazakhstan. A project that, without any great exaggeration, portends a historical landmark not only for our three countries, but for all the states in the post-Soviet space.

The journey to this frontier wasn’t easy, and at times meandering. It started twenty years ago, at the creation of the Commonwealth of Independent States in the wake of the Soviet Union’s collapse. By and large we found the model that helped to save the myriad civilizational and spiritual threads that bind our peoples together. To save the industrial, economic and other ties on which our lives are built.

There are differing perspectives on the effectiveness of the CIS, and one can spend forever criticizing its internal problems and unrealized expectations. But it’s hard to deny that the Commonwealth remains an indispensable mechanism to bridge differing positions and work out common views on the key problems facing our region, and produces visible and concrete benefits for all its members.

Moreover, it is precisely the CIS experience that informed the start of our multilevel and multispeed integration on the post-Soviet space, featuring a range of formats including the Union State of Russia and Belarus, the Collective Security Treaty Organization, the Eurasian Economic Community, the Customs Union, and finally, the Common Economic Space.

These integrative processes received a new boost during the global economic crisis, which spurred governments into seeking new avenues of growth. We have come committed to seriously modernizing the principles our partnerships are build on – both within the CIS, and within other regional associations. And we have primarily focused our attention on the development of commercial and industrial links.

The wellspring of our efforts is directed towards making integration into a continuous project that is understandable and attractive to our citizens and businesses. A project that is stable and long-term in nature, independent of political fluctuations and any other conjunctures.

Note in passing that this was the very goal set at the creation of the Eurasian Economic Community in 2000. And ultimately it is this logic of close, mutually beneficial cooperation and common understanding of strategic national interests that inspired Russia, Belarus, and Kazakhstan into forming the Customs Union.

[Beginning of premier.gov.ru translation]. On July 1, 2011 customs control over goods passing through the borders between our three states was lifted. This completed the establishment of a fully developed common customs area with clear prospects for implementing highly ambitious business initiatives. Now we are about to move from the Customs Union to the Common Economic Space. We are creating a huge market that will encompass over 165 million consumers, with unified legislation and the free flow of capital, services and labour force.

It is crucial that the Common Economic Space is rooted in coordinated action in key institutional areas such as: macroeconomics, ensuring competition, technical regulations, agricultural subsidies, transport, and natural monopolies tariffs. Later, this framework will also include common visa and migration policies, allowing border controls between our states to be lifted. In fact, we are adapting the experience of the Schengen Agreement that benefits Europeans as well as everyone who comes to work, study, or holiday in the EU.

I add that we will no longer have to equip the 7,000 kilometre-long Russian-Kazakh border. Moreover, new conditions are being created that will foster trans-border cooperation.

For the general public, the lifting of migration, border and other barriers, including what are known as labour quotas, will mean that they have a free choice about where to live, study, or work. Incidentally, the Soviet Union with its system of registered domicile did not offer anything like this complete freedom.

Moreover, the list of goods for personal consumption exempted from duties will be expanded, thus saving people the humiliating inspection at customs.

Broad swathes of opportunities will also open up for businesses. I am referring here to new dynamic markets governed by unified standards and regulations for goods and services – in most cases consistent with European standards. This is important, since we are all transitioning to state-of-the-art technical regulations and coordinated policies. This will help us avoid technological gaps or trivial incompatibility of goods. Moreover, almost all companies in our countries will in fact enjoy all the advantages of a domestic producer in all three countries, including the access to government procurement and contracts.
However, to secure a foothold in an open market like this, businesses will have to improve efficiency, reduce costs and invest in modernisation. The consumer only stands to gain from this.

At the same time, we can speak of real jurisdiction competition for entrepreneurs. All Russian, Kazakh, and Belarusian entrepreneurs will be able to choose in which of the three countries to register their companies, where they want to do business and file their customs registration. This will be a serious incentive for national administrative systems to start improving their market institutions, administrative procedures and their business and investment climate. Taken as a whole, these systems will be forced to address their inadequacies and all the lacunae they have never addressed before, and advance their legislation in line with best European and global practices.

It took Europe 40 years to move from the European Coal and Steel Community to the full European Union. The establishment of the Customs Union and the Common Economic Space is proceeding at a much faster pace because we could draw on the experience of the EU and other regional associations. We see their strengths and weaknesses. And this is our obvious advantage since it means we are in a position to avoid mistakes and unnecessary bureaucratic superstructures.

We are in touch with the three countries’ leading business associations, we discuss controversial issues with them and take into account criticism. For example, the discussions at the Customs Union Business Forum held this July in Moscow proved highly productive.

I would like to emphasise that it is highly important for us that the general public and business communities in all three countries perceive the integration project not as some kind of wheeze orchestrated by the top bureaucracy but as a living organism, and as a good opportunity to implement initiatives and succeed.

In order to better heed business interests, the decision was taken to start the codification of the legal framework of the Customs Union and Common Economic Space so that economic entities do not have to work their way through the thickets of endless passages, articles, and regulatory references. Instead, they will only need two documents, the Customs Code and the Codified Agreement on the Customs Union and Common Economic Space.

The EurAsEC Court will become fully operational on January 1, 2012. Both governments and economic entities will be able to apply to the court on all instances of discrimination or regarding the violation of competition and equitable business regulations.
The Customs Union and CES are special in that they have supranational structures which will also be guided by the basic requirements to minimise bureaucracy and heed people’s actual interests.

We believe that the Customs Union Commission’s role, which already now has significant powers, should grow further. Its jurisdiction currently includes almost 40 items and will expand to over 100, including the authority to take decisions on competition policy, technical regulations and subsidies, when the CES becomes operational. These complex issues can only be resolved by a fully developed and permanent structure – one that is streamlined, professional and efficient. This is why Russia put forward an initiative to set up a Board of the Customs Union Commission that will comprise representatives of all three states working as independent international officials.

By building the Customs Union and Common Economic Space, we are laying the foundation for a prospective Eurasian economic union. At the same time, the Customs Union and CES will expand by involving Kyrgyzstan and Tajikistan.

We plan to go beyond that, and set ourselves an ambitious goal of reaching a higher level of integration – a Eurasian Union.

How do we understand the prospects for this project? What shape will it take?

First, none of this entails any kind of revival of the Soviet Union. It would be naïve to try to revive or emulate something that has been consigned to history. But these times call for close integration based on new values and a new political and economic foundation.

We suggest a powerful supranational association capable of becoming one of the poles in the modern world and serving as an efficient bridge between Europe and the dynamic Asia-Pacific region. This project also implies transitioning to closer coordination in economic and currency policies in the Customs Union and CES and establishing a full-fledged economic union.

Its natural resources, capital, and potent reserve of human resources will combine to put the Eurasian Union in a strong competitive position in the industry and technology race, in the struggle for investors, for the creation of new jobs and the establishment of cutting-edge facilities. Alongside other key players and regional structures, such as the European Union, the United States, China and APEC, the Eurasian Union will help ensure global sustainable development.

Second, the Eurasian Union will become a focal point for further integration processes since it will be formed by the gradual merging of existing institutions, the Customs Union and the Common Economic Space.

Third, it would be a mistake to view the Eurasian Union and the Commonwealth of Independent States as opposing forces. Each institution has its place and its role to play in the post-Soviet space. Russia, together with its partners, intends to work actively towards enhancing this commonwealth and infusing it with the topical agenda.

I’m referring to the launching of specific, comprehensible and attractive initiatives and joint programmes across the CIS, including in the energy sector, transport, high tech, and social development. There are good prospects for cooperation in science, culture, and education, as well as in managing labour markets and creating a civilised environment for labour migration. We inherited a great deal from the Soviet Union, including infrastructure, a developed system of regional production specialisation, and a common space of language, science and culture. We are all interested in harnessing this resource for development.

Moreover, I am convinced that in economic terms the commonwealth must be firmly founded in extensive trade liberalisation. Holding the CIS presidency in 2010, Russia put forward an initiative to draft a new Free Trade Area Agreement based on WTO principles that envisages the complete lifting of various barriers. We hope to see significant progress in coordinating the member states’ positions on this during the next Council of CIS Heads of Government meeting slated for later this month.

Fourth, the Eurasian Union is an open project. We welcome other partners to it, particularly CIS member states. At the same time, we are not going to hurry up or nudge anyone. A state must only join on its sovereign decision based on its long-term national interests.

In this respect, I would like to touch upon an important issue. Some of our neighbours explain their lack of interest in joining forward-looking integration projects in the post-Soviet space by saying that these projects contradict their pro-European stance.

I believe that this is a false antithesis. We do not intend to cut ourselves off, nor do we plan to stand in opposition to anyone. The Eurasian Union will be based on universal integration principles as an essential part of Greater Europe united by shared values of freedom, democracy, and market laws.

Russia and the EU agreed to form a common economic space and coordinate economic regulations without the establishment of supranational structures back in 2003. In line with this idea, we proposed setting up a harmonised community of economies stretching from Lisbon to Vladivostok, a free trade zone and even employing more sophisticated integration patterns. We also proposed pursuing coordinated policies in industry, technology, the energy sector, education, science, and also to eventually scrap visas. These proposals have not been left hanging in midair; our European colleagues are discussing them in detail.

Soon the Customs Union, and later the Eurasian Union, will join the dialogue with the EU. As a result, apart from bringing direct economic benefits, accession to the Eurasian Union will also help countries integrate into Europe sooner and from a stronger position.

In addition, a partnership between the Eurasian Union and EU that is economically consistent and balanced will prompt changes in the geo-political and geo-economic setup of the continent as a whole with a guaranteed global effect.

It is clear today that the 2008 global crisis was structural in nature. We still witness acute reverberations of the crisis that was rooted in accumulated global imbalances. At the same time, the elaboration of post-crisis global development models is proving to be a difficult process. For example, the Doha Round is virtually mired in stalemate, the WTO faces objective difficulties, and the principle of free trade and open markets is itself in deep crisis.

We believe that a solution might be found in devising common approaches from the bottom up, first within the existing regional institutions, such as the EU, NAFTA, APEC, ASEAN inter alia, before reaching an agreement in a dialogue between them. These are the integration bricks that can be used to build a more sustainable global economy.

For example, take the two largest associations on our continent – the European Union and the Eurasian Union currently under construction. In building cooperation on the principles of free trade rules and compatible regulation systems they are in a position to disseminate these principles, including through third parties and regional institutions, all the way from the Atlantic to the Pacific Oceans. They will thus create an area that will be economically harmonised, but that still will remain diverse when it comes to specific mechanisms and management solutions. At that point, it will make sense to engage in a constructive dialogue on the fundamentals of cooperation with the countries of the Asia-Pacific region, North America and other regions.

In this respect, I would like to mention that the Customs Union of Russia, Belarus and Kazakhstan has already initiated talks on establishing a free trade area with the European Free Trade Association. The agenda of the APEC forum, to be held in Vladivostok next year, will include trade liberalisation and lifting barriers that impede economic cooperation. Russia will be promoting a common agreed position of all Customs Union and CES members.

Thus, our integration project is moving to a qualitatively new level, opening up broad prospects for economic development and creating additional competitive advantages. This consolidation of efforts will help us establish ourselves within the global economy and trade system and play a real role in decision-making, setting the rules and shaping the future.

I am convinced that the establishment of the Eurasian Union and efficient integration are approaches that will enable members to take a prominent place in our complicated, 21st century world. Only by standing together will all our countries be able to take their places as leaders of global growth and drivers of progress, only together will they succeed and prosper.

National Library of Belarus. Who says tractors and Bat'ka are all there is to it?

In the vein of my recent posts on the myth of Russian emigration, I am now publishing a translation of Уехать в Белоруссию (“Go Off To Belarus”) by Maksim Schweiz writing for Rosbalt news agency. It is a joint effort by Nils van der Vegte, who blogs with Joera Mulders at Russia Watchers and is now busy propagating Dutch language and culture in the Arctic cornucopia of Arkhangelsk, and myself. Nils translated the section on Belarus, I translated the section on Ukraine.

Introduction

Many pundits have stated lately that Russia is going to experience (or is already experiencing) a large outflow of people who wish to emigrate to other countries because in contemporary Russia, life is supposedly unbearable. However, by looking at the statistics, which we prefer over random quotes, this is not really the case. Also, like some other people pointed out, Russia is not that unique in that a certain percentage has the desire to leave one’s country. Even Russia’s most anti-Kremlin and pro-Western newspapers are fed up with the continuous desire to emigrate. In a recent interview on Echo of Moscow, Konstantin Remtsukov (the editor of the Nezavisimaya Gazeta) commented: “I would like to ask those people who want to “shove off” the following question: just when was it ever better in Russia?” and “Did they want to leave in 1994 and 1993 as well? What aboutin 1998? Do they think they lived better then than we do today?” Instead of doing a serious/academic post on Russian emigration (to counter all these rants) we have decided to translate a rather cynical post by Rosbalt, in which a Russian journalist advises Russians about emigrating to Belarus or Ukraine. – Nils van der Vegte.

Whereas in general terms I have nothing to add to Nils’ comments, I’m not so sure that it’s a “cynical” article. After all, we have to bear in mind that until a few years ago, more Russians left for Belarus than the reverse! This indicates that at least until the country’s recent economic troubles, if you had no special dissident or entrepreneurial proclivities, life was pretty good by ex-USSR standards. That is no longer the case. On the other hand, the Belorussian devaluation does mean that geoarbitrage of the sort I discussed in my last post here is becoming very profitable. The commentator Doug mentioned that Russians are now pouring over the border snapping up Belorussian goods that are now twice as cheap for them as they were a year ago. And property prices in Minsk suddenly look very attractive. So in this sense Russian “emigration” to Belarus doesn’t seem like a bad idea at the moment – just make sure you continue getting paid in Russian rubles! -Anatoly Karlin

TRANSLATION: Time To Shove Off To Belarus!

“Let’s get out”, but where to? In Europe and in the US we are not wanted and the Third World is too far away. For those who are fed up with Russia but who think that Europe and Asia are no alternative, there are two underrated options: Ukraine and Belarus.

There is a popular expression in the Russian blogosphere: “It’s time to shove off” (Пора валить). Usually, Western Europe is the most popular destination. But there are increasingly negative stories about emigrating there: “We are not wanted there”, “All we can do is washing the dishes” and “People are very different and difficult to socialize with” are common mantras nowadays. All of these are true. But if you really want to emigrate to “Europe” there is always Belarus or Ukraine to consider.

The first option is Belarus. Belarus is an ideal country if you want to move out of Russia and live more quietly. The only thing is that, especially now, after the crisis, it is incredibly hard to get yourself a decent living. Even the 200 Dollars needed to pay for a one-or two-room apartment in Minsk are hard to come by. But, as far as other factors are concerned, Belarus can indeed be described as the East-European Switzerland.

Living costs in Belarus are very low. You can buy a bottle of yogurt for 15 Russian rubles, Kefir costs 10 rubles per bottle, a kilo of cooked sausage 10 rubles per kilo and for bread you only pay 12 rubles. An evening in a café or bar in the centre of Minsk costs you about 300-600 Russian rubles.

Belarus has almost completely eradicated corruption: bribes are not necessary when visiting a clinic or during a visit to whatever government agency. Here, the police does not take bribes. If you are caught drunk behind the wheel you have to pay a fine of Moscow-like proportions (1000 Dollars) or lose your drivers license for three years. The latter of these is the more likely outcome, since Belorussian cops are very afraid of taking bribes.

In Belarus, your health will surely improve, and not just because of the famous sanatoriums. For a total of 60-90 rubles you can go ice skating the whole evening. Alternatively, you can also go to the huge “Palace of Water Sports”. In general, the entry fee to all public buildings and the usage of government social services is, by Russian standards, very cheap.

Real estate is very cheap in Belarus. You can get a studio apartment in Minsk for $150 per month, or $200 for a renovated one. Buying a standard one-bedroom apartment will cost you $50,000-$60,000. This is expensive for the locals but not for you Russians, accustomed as you are to “Moscow prices”. Minsk itself is a nice place to live in: it’s full of trees and relatively clean air. Also, Minsk is ideal for couples with children: if you want to send your children to kindergarten it will only cost you 2000 rubles per month.

Now for the minuses. In Belarus, it is very difficult to do business. Even more difficult than in Russia. In Moscow, many issues can be resolved by simply coming to an “understanding” with someone, in Belarus every misstep can lead to confiscation of your property. Also, if you dare to hide your profits and evade taxes, it could put you behind bars for a considerable time. Bureaucratic procedures in Belarus are even worse than in Russia: don’t think that you can register your company within a single day or even within a week. The security services make conducting business here a nightmare, and it is as hard for a businessman to get compensation for his grievances against the state in Belarus as it is in Russia.

For people who are accustomed to Moscow-like entertainment, Belarus is a hard place to live. In Minsk, as well as in the rest of Belarus, there is very little nightlife and if there is, the interior, service and staging is unlikely to be attractive. Belarus does not have a decent amusement park, so don’t think you can somehow organize a nice family day in Minsk. Also, it takes ages before movies from Europe/America arrive in Belorussian cinemas. Don’t expect a Shakira or Madonna here: concerts of world stars almost never happen, prominent sporting events are also absent in Belarus. Belorussians are in general are fond of a quiet, family life. And this is something you have to get used to.

Another decent emigration destination for a Russian, who still hasn’t firmly set his sights on Europe, is Ukraine. This country is the exact opposite of Belarus. You can only really live in two cities – Kiev and Odessa. All others emanate an indescribable sense of gloom and despondency. The Ukraine is dirty, food and entertainment are twice as expensive, and property costs as much or a bit more. There are no affordable gyms or swimming pools. Registration issues are far more inconvenient for Russians than is the case in Belarus, where you can emigrate easily without problems. Healthcare is atrocious, and bribes have to be given for practically everything – even for a consultation in any office. Drunken drivers stopped by the Ukrainian police can buy themselves off for only $200.

On the other hand, Kiev boasts loads of attractions. Here there are always plenty of concerts, many of them free. You can eat lunch in the city centre for only 500 rubles.

There is one unarguably bright side to life in Ukraine – freedom of action. Only in Ukraine will you see signs with “Cafe” or “gas station” on them right in front of ordinary village houses, adjacent to the freeways. Only in Kiev will you see coffee and sandwiches being sold straight out of old, bright-orange Moskvitch cars. You don’t even need a passport to buy a SIM-card. No policeman here will drive out a musician with his guitar and begging cap out of the town centre, or demand to see your passport and registration documents.

People in the Ukraine are responsive and friendly – don’t believe the tales that they dislike Russians. It’s common here to greet fellow customers in the shops and to cut off a piece of cheese for sampling, if you can’t decide which one you want. For all the “backwoods” character and friendliness of Kiev’s townspeople, on weekdays it is full of milling throngs and clonking horns. The tempo of life beats much faster than in Minsk, and is more reminiscent of Moscow – everybody is hurrying somewhere, and getting wound up when they have to stand in traffic jams. And, in contrast to the Belorussian capital, there are certainly plenty of those.

That said, it seems that it’s far easier to do business here, than in Minsk – at least, it’s plainly visible in that there are many home-grown entrepreneurs, who don’t need even a stall to hawk their wares and ply their trades. They do with just an ordinary umbrella.

Summing up, dear Russians, there are many paths of retreat. And if you are firmly set on “shoving off”, then consider that it doesn’t necessarily have to be far away and permanent. There are closer and more humane alternatives.

In summary, the excess deaths from the once-in-10,000-years heatwave canceled out most of the increase in births, causing the rate of natural decrease to fall by only 7,400 relative to 2009. Adding in the 82,500 drop in net immigration for Jan-Nov 2009, and we can estimate that Russia’s population will fall by about 50,000 this year (cf. an increase of 23,300 in 2009).

Continuing my tradition of tracking demography across Eurasia generally, let’s take in the wider picture. A fall in births – probably caused by the POR’s austerity policies – caused Ukraine’s natural population decrease to rise from 172,570 in 2009 to 181,505. An increase in net migration from 11,792 to 14,469 means a population loss of about 167,000 in 2010.

Belarus registered a deterioration, with birth rates falling from 11.5 / 1000 to 11.4 / 1000, and death rates rising from 14.2 / 1000 to 14.5 / 1000. This is somewhat puzzling since according to the official statistics, Belarus was hardly affected by the global economic crisis.

But it has nothing on Latvia. In the thrall of a Great Depression-scale collapse, its birth rates have dropped by about 25% relative to 2008. This means that its total fertility rate has collapsed from its post-Soviet peak of 1.45 children per woman in 2008 to around 1.1 today. Its net emigration has risen from 200 / month in 2008 to 700 / month in 2010. All things considered, it’s probably in Europe’s deepest economic hole now.

Back in November 2008, the VTsIOM polling site released some very detailed results about what peoples in the former Soviet Union think about each other. The first graph below asks people which countries they consider to be friends or allies of their country.

And these were the results. Some 74% of Belarussians, 58% of Ukrainians, 49% of Moldovans, 82% of Armenians, and 67-89% of Central Asians named Russia as a friend and ally. In contrast, only 11-17% in Georgia, Azerbaijan and Lithuania like Russia this way, but that is hardly surprising. (The Latvians are rather higher at 26%, presumably because of their large Russian minority, though far higher numbers, almost half of them, orient themselves with the other Baltic states).

The poll below is even more telling. It asks peoples in the former USSR to name which countries or blocs they would like to unite with, the main contenders being Russia, the EU, and “independence”.

Russians are mostly split between those favoring some kind of Slavic or Eurasian bloc (37% – Belarus, 29% – Ukraine, 24% – Kazakhstan), and Russia-as-is (32%); the European Union really isn’t that popular at 15%. This isn’t much different in Ukraine or Belarus. Some 56% of Belarussians and 47 of Ukrainians would like to unite with Russia, while 25% and 22% favor the EU, and 18% and 25% favor independence, respectively. Some 51% of Kazakhs favor Russia and 32% independence.

The Moldovans are equally split between Russia and the EU or independence (which in practical terms would mean the Romanian sphere of influence). The Azeris identify most strongly with Turkey, with 31% expressing a desire to join it, followed by 24% yearning for the EU and 24% for continued independence. Big majorities (65-73%) in the Central Asian nations of Tajikistan, Kyrgyzstan, and Uzbekistan would like to rejoin Russia, which is unsurprising given their relative underdevelopment and the relative success of Russification there. Georgia has always had a strong sense of national identity, including during the Soviet period, so by far the majority there wants independence (38%) or the EU (37%); only 10% wouldn’t mind falling back into Russia’s sphere of influence.

Why is this important? Because to some extent, even in semi-authoritarian systems, national leaders are to some extent beholden to popular sentiment. This is not to say, of course, that this is the only factor – an objective assessment of national interests (which are often synonymous with the interests of the ruling elites) almost always trumps anything else. But it does illustrate that the much ballyhooed “Russian resurgence” across the former USSR rests on firmer foundations than just political pressure or economic takeovers – of at least equal importance is that many of the peoples in its path back to regional hegemony aren’t actually that averse to it*.

PS. Another useful survey of attitudes towards Eurasian regional integration by Gallup: “In all countries except Azerbaijan, the median average wants at least an economic union across Eurasia”.

* The big exception is Georgia. This is where there is both a clash of primary geopolitical interests (the irreconcilability of Georgia westward path and Russia’s desire to anchor itself in the South Caucasus) and of civilizational values (AFAIK, the only social grouping in Georgia with a real pro-Russia tendency are the monarchist “People’s Orthodox Movement“). Coupled with simmering border tensions, it is probably not surprising that this developed into a flashpoint for armed conflict.

Now I’ve never really worried about the consequences on mortality of an economic recession, because I don’t buy into The Lancet‘s arguments that it was the reduction in Russian social spending in 1998 that contributed to the mortality wave of 1999-2002, since the increasing affordability of, and consumption of, alcohol was by far the more convincing factor. (Also, in industrialized states, recessions tend to correlate with falls in mortality rates). On the other hand, hard recessions – especially ones which result in reduced public spending on social welfare – usually are associated with substantial reductions in fertility. In this post I’m going to take a look at how valid these observations and theories are in light of the recent economic crisis in Eastern Europe.

Russia. At the start of the crisis in late 2008, I expected Russia’s fertility rate to fall slightly – though nowhere near the magnitudes predicted by Russia’s “demographic doomers”, of course. (Though even for that I got a lot of flak). Yet ironically even my predictions turned out to be too pessimistic, probably because increased government spending meant that Russians’ social welfare hardly suffered at all during the crisis. Even Russia’s fertility rate continued to climb, reaching 1.56 in 2009 (2008 – 1.49, 2007 – 1.41, 2006 – 1.30), a level last seen in 1992. And like I said, Russia’s trends towards falling mortality actually accelerated, with life expectancy for both genders hitting 69.0 years in 2009 (2008 – 67.9, 2007 – 67.5, 2006 – 66.6, 2005 – 65.3) – a level that was only ever previously observed in 1963-1974 and 1986-1991. Most encouragingly, Russians’ mortality from “vices” – homicide, alcohol poisoning, and suicide – have fallen back to their late Soviet levels. The decline in alcohol poisonings is particularly good because much of Russia’s “hyper-mortality” (including the high rate of heart disease) is tied to excessive alcohol consumption.

[Source: Rosstat].

Demographic improvements relative to the same period last year continued in Q1 2010, with the birth rate up another 1.3% and mortality rates falling by 2.0% (inc. by about 10% for external causes). (The figures on fertility are particularly significant when you recall that Russia reached the nadir of its economic crisis in H1 2009). According to Sergey Slobodyan’s demographic model, the data indicates that a projection of 1.9-2.0mn deaths and 1.8-1.9mn births in 2010 is feasible, meaning that natural population decrease will almost cease (the total population should grow, as last year, due to immigrants).

Conclusion – contrary to hysterical predictions of economic and demographic apocalypse propagated about Russia in late 2008, the real impact on social welfare was very marginal and the demographic situation actually continued to improve. This year, Russia’s life expectancy will probably approach 70 years (still very low for an industrialized country) and its total fertility rate will hit around 1.6 children per woman (as in Canada). Although the mortality rate remains very substandard relative to the industrialized world, current healthcare and anti-alcohol initiatives are helping usher in rapid improvements.

PS. There has been a small update to Rosstat‘s demographic projections. Its middle projection now indicates a population of 140.9mn and its high projection a population of 146.7mn in 2025, relative to 141.9mn in 2009; in the last few years, Russia’s demography has tracked between the High and Medium projections. (This is in line with my own forecasts).

Ukraine. Mark Adomanis claims that Ukraine has a “much more serious demographic crisis than Russia”. But much as one can condemn Orange mismanagement of the economy and social relations, it can’t really be said in good faith that its demography is a lot worse. Whereas its birth rates are lower and its death rates are higher than Russia’s, this is in large part because Ukraine has a marginally older median age than Russia.

Let’s instead use measures that cancel out the effects of specific population age structure. Ukraine’s life expectancy (68.3) was marginally better than Russia’s (67.8) in 2008 (World Bank), and its big mortality reductions in 2008-09 indicate that it kept the lead. Similarly, Russia’s fertility rate (1.49) is not awesomely bigger than Ukraine’s (1.39) in 2008, and may be partly or wholly explained by the fact that Russia’s demographic collapse in the 1990’s was both quicker and sharper than Ukraine’s. Finally, both countries have been displaying very similar demographic dynamics in recent years, despite their political differences – a moderate recovery in fertility rates (from a low base), and plummeting death rates (from a very high base).

[Source: World Bank Development Indicators. Note that for all the vast differences in the political economy and post-transition success of Russia, Latvia, Belarus, and Ukraine, their fertility (and overall demographic) dynamics are remarkably alike].

Now what about the crisis, which hit Ukraine much harder than Russia? (Ukraine’s GDP declined by 15% in 2009, compared to Russia’s 9%, and it wasn’t cushioned by increased government spending on social welfare). Ukraine’s birth rate increased ever so slightly from 11.0/1000 in 2008 to 11.1/1000 in 2009 (but fell from 11.2/1000 in Jan-Feb 2009 to 10.7/1000 in Jan-Feb 2010). Meanwhile, its death rate decreased from 16.3/1000 in 2008 to 15.2/1000 in 2009 (and from 17.2/1000 in Jan-Feb 2009 to 16.4/1000 in Jan-Feb 2010). In crude terms, Ukraine had a higher rate of natural population decrease than Russia (-4.2/1000 versus -1.7/1000 in 2009), and its overall population is still falling fast because unlike Russia it does not have many immigrants.

Nonetheless, the Ukrainian crisis is now easing and the new government seems to be moving from concentrating on historical grievances to modernization and stability. Given the inherent similarities between and increasing integration of Russia and Ukraine, their demographic dynamics will probably be likewise similar - a recovery of fertility rates to 1.7-1.8 within a few years, a rise in life expectancy to 75 years within a decade, substantial net migration to Russia and zero net migration to Ukraine. The result would be a slowly rising or stagnating population in Russia, and a stagnating or slowly falling population in Ukraine.

Conclusion – Ukraine is experiencing a demographic recovery, with particularly impressive gains in life expectancy during the crisis. Though its fertility rate remained more or less stagnant, it now again shows signs of improvement – a good sign, since nine months ago Ukraine was still at its economic nadir.

Belarus. Thanks to its isolation from the global financial system, Belarus did not experience much of an economic crisis at all. It’s GDP even grew by 1.5% in 2009, and has since expanded by 6.1% in Jan-Apr 2010 relative to the same period last year. But ironically, its demographic improvements have been modest.

The birth rate rose from 11.1/1000 to 11.6/1000 and the death rate rose from 13.8/1000 to 14.2/1000 from 2008 to 2009*. (In Q1 2010 relative to the same period last year, the birth rate fell from 11.3/1000 to 11.2/1000 and the death rate fell from 15.3/1000 to 15.1/1000). The rate of natural increase eased slightly to -2.5/1000 in 2009, from -2.6/1000 in 2008.

This means that Belarus retained a fertility rate of about 1.45-1.5 children per woman in 2009, compared to Russia’s 1.56 and Ukraine’s 1.4-1.45, and its life expectancy was somewhat higher than both at 70.5 years in 2008 (very slightly lower in 2009), compared with Russia’s 69.0 years in 2009 and Ukraine’s 68.3 years in 2008 (maybe a year higher in 2009).

Conclusion – despite emerging from the crisis largely unscathed, the demography of Belarus showed no significant improvement (or deterioration).

Latvia. Latvia saw a catastrophic decline of GDP of 18% in 2010 and its welfare state has been decimated to a degree unparalleled anywhere else in Europe (at least so far). From 2008 to 2009, births fell by 9.5% and marriages, a very rough indicator of future fertility, fell by a truly stunning 23.3%. The decline continued into 2010, with births in Jan-Mar falling by 11.6% and marriages declining by 22.4% on the same period in 2009. Since Latvia’s total fertility rate was a not too healthy 1.45 back in 2008, this means that it is now in one of the deepest demographic chasms in Europe.

[Source: Latvijas Statistika].

On the positive side, Latvia did see modest improvements in its mortality rates, which fell by 3.6% from 2008 to 2009 (though they’ve remained almost stagnant so far in 2010). Unsurprisingly, after a period of demographic recovery in the 2000′s, Latvia’s rate of natural population decrease has started opening up again, rising from a loss of 7058 people in 2008 to 8220 people in 2009, and almost certain to increase further this year.

Small consolation. Going by the experiences of other countries in the region, the falling marriage rate in Latvia should have been accompanied by a simultaneously falling divorce rate, so the post-2008 annual decline in net couple formation should have been less than 20%.

Estonia. Estonia’s had a milder recession than Latvia with a GDP fall of 14% (it’s all comparative!) and it did not decimate its welfare state to quite the same extent. It also started from a position of significantly greater affluence and its fertility rate was at 1.66 children per woman in 2008. The number of births fell by 2.6% from 2008 to 2009, and by a mere 0.9% in the first four months of 2010 relative to the same period last year. This decline was outpaced by improvements in longevity, with mortality rates falling by 3.7% in 2009 relative to 2008, and a further 3.5% in the first four months of 2010 relative to the same period in 2009. Since it now shows signs of mounting an early recovery, the crisis should not make a big dent in Estonia’s long-term demographic prospects.

Lithuania. Their situation seems to have become somewhat worse, based on the monthly estimates of the population size for 2009. But their national statistics site is bad and doesn’t have detailed recent data so I can’t really say much more than that it is worse than in Estonia but far better than in Latvia.

Conclusion – the crisis has been a demographic disaster for Latvia, with its total fertility probably falling to a “lowest-low” rate of around 1.2 children per woman by 2010. Since its economic crisis seems to be deep and long-lasting, with deleterious effects on social welfare, we can expect a resumption of demographic free fall and perhaps a rise in ethnic Russian emigration to (fast recovering) Russia. In contrast, Estonia’s stronger foundations weathered the crisis well and its total fertility rate, now at perhaps 1.6 children per woman, is still relatively healthy by East and Central European standards.

Caucasus. In Armenia, the crude death rate remained unchanged at 8.5/1000 from 2008 and 2009, while the birth rate rose from 12.7/1000 to 13.7/1000, despite its big decline in GDP during the crisis. Given that its total fertility rate was at 1.74 in 2008, it is doing fine. Georgia is probably doing OK, since their population actually rose in 2009 – the only other post-Soviet year in which Georgia experienced population growth was in 2006, which happened to coincide with Russia’s deportation of illegal Georgian immigrants.

Moldova. Doesn’t have vital stats for 2009. Its overall population fell by five thousand people in 2009 relative to 2008, which is lower than usual, since on most years it falls by around ten thousand. I don’t think this was due to demographic improvements – don’t forget that many Moldovans were returning from their work in Russia during its recession in 2009.

Rest of post-Soviet space. Azerbaijan and Central Asia don’t need to be considered since they have healthy demographics anyway.

The Balkans. Birth rates and death rates seemed to have remained essentially stable from 2008 to 2009 in Bulgaria and Romania, with a slight improvement overall. Crisis hasn’t affected them much – at least, not yet.

Final conclusion – overall, the crisis did not greatly affect the demography of the Eurasian region. There continued to be modest improvements in the two most populous nations, Russia and Ukraine. The death rate has fallen rapidly during the crisis almost everywhere, the sole exceptions being Belarus and Romania where it increased by a tiny amount. On the other hand, birth rates have either risen slowly (e.g. Russia), stagnated (e.g. Ukraine), or fallen slowly (e.g. Estonia). The major exception is Latvia, where birth rates have collapsed at an amazing rate from regional average to “lowest-low”. This reflects the particular severity of the economic crash in Latvia.

* The real rise in the birth rate and the death rate from 2008 to 2009 are actually slightly exaggerated. That is because from 2009, Belarus lowered its total population (on the basis of which birth and death rates / 1000 people are calculated) to correlate with the preliminary results of the 2009 Census. The actual number of births rose from 107.9 thousand to 109.8 thousand and the number of deaths rose from 133.9 thousand to 135.0 thousand.

It should be noted that political assassinations aren’t that rare. Apart from Mossad’s well-known activities, there immediately comes to mind 1) Iran’s large-scale campaign of assassinations in the 1980′s-90′s of emigre dissidents / separatists, 2) Russia’s war against the Chechen separatists (e.g. Yanderbiyev, killed in Dubai, 2004 by GRU operatives), and 3) the US war on terror, in which members of terrorist organizations vanish into “black holes” not to reemerge. No doubt many other, more circumspect nations can be added to this list.

The problem with assassination as a political or military tool is that it is rarely effective. Few organizations are so dominated by a single charismatic leader that his decapitation would deal it an irreperable blow. In practice, most successful organizations – be they political, military, terrorist, criminal, etc – have highly dispersed power structures, with strong horizontal layers ready to slide in to fill the gap should any single vertical be destroyed. This is particularly the case for clandestine groups, since some of their operatives are expected to get detected and killed.

In the media age, assassination has in many cases become decidedly counterproductive. Typically, the minimal gains in direct damage to the enemy are massively outbalanced by negative press coverage, diplomatic blowback, the uncovering of useful intelligence assets, etc. The only real benefit, such as it is, may be emotional. This is almost certainly the case here.

2. Speaking of terrorists, Osama bin Laden calls for an “economic jihad” versus the United States – on the basis that it is a major CO2 polluter! He goes on to say, “Talk of climate change isn’t extravagant speculation: it is a tangible fact which is not diminished by its being muddled by some greedy heads of major corporations. The effects of global warming have spread to all continents of the world”. The solution? Though the first and most important thing is of course to “dedicate worship to God and ask for forgiveness”, nonetheless being “economical in all of our affairs” and striving to “avoid luxury and wastefulness, especially in food, drink, clothing, housing and energy” is also very important.

Now Osama and S/O don’t normally see eye to eye, but in this case he does have a point. The threats posed by climate change are orders of magnitude bigger than the sum of all terrorism. However, Osama’s specific anti-US slant is unhelpful (“we should refuse to do business with the dollar and get rid of it as soon as possible”, since this is “an important way to liberate humanity from enslavement and servitude to America and its corporations”). In reality, in the post-Bush era, it is China that is now the biggest obstructionist to global commitments on CO2 emissions cuts. If he was really serious about curbing climate change, Osama would have called for a global embargo on the entire industrial System.

3. You think I’m being crazy (partially) siding with a terrorist on AGW? But really what else is one supposed to do when one stumbles across real life satire like South Dakota legislators’ call for ”balanced teaching of global warming in the public schools of South Dakota” (h/t Lou).

Instead of taking the time to understand the science, South Dakota legislators submit as proof against climate change this remarkable list: “[T]here are a variety of climatological, meteorological, astrological [sic], thermological, cosmological, and ecological dynamics…”

No, that isn’t a misprint. South Dakota legislators actually proposed astrology as evidence against climate change. Do they think glaciers melt slower when Virgo is ascending?

South Dakota legislators probably meant to say “astronomical,” but that also makes no sense. The astronomical influences on climate are well-understood by scientists. Recent climate changes are occurring independently of astronomical influences. …

Even more disturbing than these errors is the underlying premise of HCR 1009: the assumption that political bodies, rather than scientists, should have the final say over scientific issues. We have recently seen this kind of thinking in Louisiana, where a 2008 law opened the door to non-scientific attacks on evolution and climate change. Last year, theTexas State Board of Education rewrote science standards to remove the age of the universe, mandate “different views” on global warming, and include standard creationist talking points against evolution.

No comment.

4. The Attack on Climate-Change Science Why It’s the O.J. Moment of the Twenty-First Century by Bill McKibben.

5. A wonderful site on Global Warming Art (h/t Lou again). In particular, I liked the following:

• Florida sea level rise
• Bangladesh sea level rise – this England-sized country has more people than Russia and is still growing rapidly… and much of it is just a meter or two above sea level.
• Antarctica without Ice – perhaps the Bangladeshis will be able to move here.
• Global Temperature Record 1880-2008 – no, the world isn’t “cooling”, much as the deniers might scream otherwise.
• Solar Cycle Variations – for those of you who point to fluctuations in solar irradiation as the cause of global warming, note that this measure has been falling since the early 2000′s.
• Electricity Use by US State – red states have been using more and more; meanwhile, California now actually uses less than in the late 1970′s.

6. In last week’s Sublime News #1, I covered Russia’s accelerating demographic turnaround. As of 2009, its birth rate was 12.4 / 1000 (2008 – 12.1) and its death rate was 14.2 / 1000 (2008 – 14.6). What about other related nations?

In Ukraine, the birth rate was 11.1 / 1000 (2008 – 11.0) and the death rate was 15.3 / 1000 (2008 – 16.3). However, overall it is closer to Russia than it appears, because Ukraine’s population is slightly older and so can be expected to have slightly more deaths and slightly fewer births per capita.

It is interesting to note that despite Ukraine’s massive, 15% drop in GDP (compared to Russia’s 7.9% drop), even fertility rates managed to eke out a tiny increase. This is not surprising by analogizing to Russia. During the turbulent transition era, many women postponed having children while the desired fertility rate and “average birth sequence” remained little changed from the late Soviet era, when the fertility rate was close to the population replacement level. As such, many women are now “catching up” and beginning to have the children they didn’t in 1992-2006. In Ukraine as in Russia, these dynamics mean that we can reasonably expect the TFR to hit a rate of about 1.7-1.8 within a few years and stabilizing.

In Belarus, the birth rate was 11.6 / 1000 (2008 – 11.1) and the death rate was 14.2 / 1000 (2008 – 13.8). Ironically, its death rate increased slightly despite its GDP growth for 2009 being ever so slightly positive at 0.2%. I mentioned Latvia‘s severe fall in fertility in #18 of the last issue.

For Russian speakers or Google Translate users, Не дадим себя похоронить (Иван Рубанов), a 2007 article arguing that Russia’s demographic fall is reversible. (I joined the party in 2008). Haven’t read it, yet, but you feel free to do so.

7. Collapse of Pax Americana watch: China PLA officers urge economic punch against US. The PLA colonels are none too happy with US military sales to Taiwan, and since China is now stronger than it was several years back, it feels it can now express its unhappiness in more overt ways. It is also accelerating its military spending increases and slowly growing more assertive on the world stage.

8. Karl Naylor, a Polish-residing British expat with Russophile tendencies, suspends his blog.

9. EIA International Total Primary Energy Consumption and Energy Intensity. Great stats database.

10. Visible Earth – super-high resolution photos of the Earth from NASA.

11. On Turkey: Between Russia and the West: Turkey as an Emerging Power and the Case of Abkhazia (Laurent Vinatier).

ABSTRACT. Turkey’s foreign policy finds itself in transition. Considering the new emerging context and the constraints that Turkey faces, it is essential to assess the real determinants which would transform Turkish foreign policy to encompass a more pro-active, independent, and regional strategy. Abkhazia, since its recognition by Russia on August 26, 2008, is examined here as a case study. South Caucasian issues in general and Abkhazia in particular may be essential bargaining chips for Turkey to substantially improve its stance from the Black to the Caspian Seas, assuming its new-found “emancipation” from U.S. influence and thus becoming a real regional power in the region. If all these successful challenges are met successfully, then Turkey will move to the gravity center of an EU-Russia-Iran triangle, where it will occupy a pivotal and geostrategic position.

The man behind Turkey’s strategic depth (Caleb Lauer).

From his post as a professor of international relations, Davutoglu argued that Turkey, now freed from the East-West political geography of the Cold War and embedded in the new geography of globalization, should no longer be thought of as an appendage of the West, but rather as a country at the center. He elaborated this idea in his 2001 book Strategic Depth and the title has since become a shorthand description of Davutoglu’s “doctrine”. The basic idea is that Turkey, a central, pivotal country, must use its unique geography and history to its foreign policy advantage. …

If Turkey’s strategic advantage is, as Davutoglu says, in its geography and history, then this advantage is certainly deep. Located in both Asia and Europe, Turkey borders the Balkans, the Caucuses and the Middle East. Across the water from its Black Sea, Aegean and Mediterranean coasts, Turkey has 25 coastal neighbors. All traffic into and out of the Black Sea goes through the Turkish Straits. The Tigris and Euphrates rivers begin in Anatolia, and thus Turkey controls the freshwater of Syria and Iraq. At least 12 million Kurds live in Turkey and more than 5 million Kurds live over its border in northern Iraq. Turkic languages and cultures cover the ground between southeastern Europe and northwestern China. And Istanbul, once seat of the caliphate and the Ottoman Empire, ruled Jerusalem, Sarajevo, Mecca, Cairo, Belgrade, Damascus and Baghdad for generations.

Davutoglu has pushed Turkey to use this “strategic depth” to become a key global player and take stakes in the world’s, especially the West’s, most high-profile issue areas.With the largest NATO army besides America’s, Turkey wants to ensure stability in northern Iraq once the Americans are gone. Turkey is the centerpiece country of the Nabucco natural gas pipeline project, intended to free Europe from reliance on Russian gas. Turkey has sought a reputation for mediating tough disputes: in Bosnia; between Israel and Syria; and between its two friends, Iran and America. (One Turkish writer joked that Turkey should ask Turkey to help improve the currently strained relations between itself and Israel.) …

Though in the thick of major Western concerns – Iraq, Afghanistan, Israeli-Arab peace, energy, Islam, EU – the central goal of all this policy is business: increase trade, attract foreign investment and provide for Turkey’s economy. In AKP foreign policy speeches one regularly hears about Turkey’s “young and dynamic population” who will need jobs, and whose careers and businesses will have to grow. …

Some call Davutoglu’s foreign policy “neo-Ottomanism”. And to listen to one AKP member of parliament speak of his “pride” at seeing the Ottoman walls that enclose the old city of Jerusalem, and of the Bascarsi in Sarajevo, it is clear Ottoman nostalgia warms the foreign policy imaginations of at least some in the Turkish government. …

Critics also say Davutoglu and the AKP have “Islamified” Turkish foreign policy. Religion is part of the worldview of the AKP and affects the way it governs. But the accusation of “Islamification” is clearly designed to play on prejudices and scare Western and secular observers. Many liberals and progressives in Turkey dismiss – or willfully ignore – the accusation as a point of principle. These two poles of fear mongering and dismissal have kept much helpful debate from reaching foreign ears.

Ironically, given the accusations of “Islamification”, there’s no clear moral basis to Davutoglu’s foreign policy. This may not be missed by those who like their foreign policy analysis on ice. But treating all parties with “mutual respect” and on a principle of “equality”, as Davutoglu advocates, risks being blind to real differences between, for example, Greece and Iran, or Israel and Sudan. This is, at least partially, why many find it easy to wonder whether Turkey is “leaving” the West.

Again, this may not be a problem for those who think George W Bush discredited the whole notion of distinguishing dictators from democrats. The AKP stresses that engagement with its neighbors is not a luxury, and claim they do communicate misgivings privately. But the question remains: will the masses of Turkish voters who keep the AKP in power eventually demand to hear in which terms – ones nobler than economic self-interest – their government describes its goals abroad, and on what grounds it considers a friend to be a friend? After all, “democracy” and “democratization” are the AKP’s domestic policy mantras, and the AKP has been very happy to point out America’s and the EU’s various double standards.

12. Common sense from George Hewitt – Georgia’s new plans to reintegrate Abkhazia and South Ossetia ignore a fundamental problem: their people aren’t interested.

13. Lost eXile, – good expose of the eXholes, the people behind the world’s best magazine (now sadly dead). Their reaction to the article here.

14. Speaking of silly antics, UKIP demagogue blasts the EU President and Belgium. Funny stuff.

15. Energy Follows Its Bliss - A good summary of EROIE, emergy, & energy concentrations from collapse theorist John Michael Greer

16. From CEPR, US military spending now accounts for 5.6% of GDP.

Defense spending continues to be an important factor pushing the economy as it has grown rapidly even as the economy has shrunk. Defense spending now accounts for 5.6 percent of GDP, the largest share since the first quarter of 1993. By comparison, it peaked at 7.6 percent in the 3rd quarter of 1986, at the height of the Reagan build-up. In its last pre-September 11th projections, the Congressional Budget Office projected defense spending for 2009 as 2.4 percent of GDP.

Note: As a rule, almost all official figures for military spending are systemically biased to the low side.

17. The Chemist’s War: The little-told story of how the U.S. government poisoned alcohol during Prohibition with deadly consequences (Deborah Blum).

18. Berezovsky is none too happy with Yanukovych’s victory in Ukraine’s presidential elections (not surprisingly since he was one of the people bankrolling the Orange Revolution).

Editor’s note: This address by Russian millionaire Boris Berezovsky, who is living in exile in London after becoming an enemy of Russian Prime Minister Vladimir Putin, was written in an emotional and aggressive style, using prison slang and other expressions that may be offensive. The translation only gives a vague idea of what he meant to say.

Quite amazing.

• Another translation by Leoš Tomíček.
• Original Russian version.

19. Russian Growth Forecast Raised to 6.2% at Citigroup (Update1) – Stronger than expected recovery.

20. The world economy has no easy way out of the mire by Martin Wolf.

Anybody who looks carefully at the world economy will recognise that a degree of monetary and fiscal stimulus unprecedented in peacetime is all that is prodding it along, not only in high-income countries, but also in big emerging ones. The conventional wisdom is that it will also be possible to manage a smooth exit. Nothing seems less likely. So let us consider the endgame, instead.

We must start from the reverse side of the stimulus coin: the private sector is now spending far less than its aggregate income. Forecasts in the Organisation for Economic Co-operation and Development’s latest Economic Outlook imply that in six of its members (the Netherlands, Switzerland, Sweden, Japan, the UK and Ireland) the private sector will run a surplus of income over spending greater than 10 per cent of gross domestic product this year. Another 13 will have private surpluses between 5 per cent and 10 per cent of GDP. The latter includes the US, with 7.3 per cent. The eurozone private surplus will be 6.7 per cent of GDP and that of the OECD as a whole 7.4 per cent.

Moreover, the shift in the private sector balance between 2007 and 2010 is forecast to exceed 10 per cent of GDP in no fewer than eight OECD member countries (see chart). It is also forecast to exceed 5 per cent of GDP in another eight. In the US, it is forecast to be 9.6 per cent of GDP. In the eurozone, it is forecast at 5.5 per cent of GDP and in the OECD at 7.3 per cent. Depression threatened. …

At the 75th birthday conference of the Reserve Bank of India this month, Mr White gave a lucid version of his critique. With inflation kept down by supply shocks, inflation-targeting central banks kept interest rates too low too long. The result, he argued, was a series of imbalances, not dissimilar to those in the US in the 1920s and Japan in the 1980s. In particular, with the real interest rate well below the rate of growth of economies, the expansion of credit was effectively unconstrained. Debt duly exploded upwards.

Mr White pointed to four imbalances: asset price bubbles, notably of stocks in the 1990s and houses in the 2000s; the explosion of the balance sheet of the financial sector and increase in its exposure to risk; what “Austrian school” economists dub “malinvestment” – soaring consumption of durables in high-income countries and booming construction of housing and shopping malls in countries such as the US, and of export-oriented factories in China; and, finally, trade imbalances, with capital pouring into the US and other high-spending countries. …

Unhappily, the result of what I call success would probably be a still bigger financial crisis in future, while the results of what I call failure would be that the fiscal rope would run out, even though reaching the end might take longer than worrywarts fear. Yet the big point is that either outcome ultimately leads us to a sovereign debt crisis. This, in turn, would surely result in defaults, probably via inflation. In essence, stretched balance sheets threaten mass private sector bankruptcy and a depression, or sovereign bankruptcy and inflation, or some combination of the two. …

… The essential ingredient of a successful exit is, instead, to use the huge surpluses of the private sector to fund higher investment, both public and private, across the world. China alone needs higher consumption.

21. I acquired an iSimulate @ World Bank account and look forwards to playing with their economic models.

2009, Dec 28: Around 60% of Russians are against the building of a sleek 400-meter skyscraper, the Okhta Center, in central St.-Petersburg, while only 21% are for. Myself, I’m of two minds about it. Though I like skyscrapers, I don’t want to see any public money going to Gazprom ego-building.

Dec 24: The Western tradition of celebrating Christmas on December 25th is not catching on in Russia, with only 4% of Russians saying they will do so this year.

Nor are perceptions of the reform era getting any better. In 2009, only 29% of the population considers the post-1992 period to have been good for the country, whereas 49% disagree. Furthermore, only 23% feel they personally benefited from those reforms, while 50% disagree. However, a majority feel, nonetheless, that some kind of “perestroika” was necessary to reform the Soviet regime.

Today, the majority of the population – 51% – would like to see more state involvement in the economy and social protections, though only 15% would like a return to the Soviet model (down from 20-30% before 2006), and an even smaller 10% favor a course of reducing government and focusing on creating on more opportunities for entrepreneurs.

Summing up 2009, although Russians considered the year to be worse than 2007 or 2008, there is no evidence the economic crisis had an inordinate effect on their subjective perceptions of success.

Dec 21: There remains a strong nostalgia for the Soviet past, or what I like to call an “imagined past of a bright socialist future”. Around 60% of Russians still regret its collapse, so no wonder it is returning to its future.

Furthermore, the majority believe that Soviet collapse was not inevitable (a viewpoint backed by some theoretical work).

Proposed remedies for the future include closer, voluntary ties between the post-Soviet republics (27%), a Eurasian EU-like confederation (22%), a neo-USSR (16%), independent coexistence amongst the former Soviet republics (14%), and the continuation of the CIS in its current state (13%).

Dec 17: Putin and Medvedev continue dominating the political scene, and retain very high approval ratings. On the question of “tandemocracy”, 55% believe Medvedev is merely continuing Putin’s policies, and 48% believe power is shared equally between Medvedev and Putin (while 30% believe Putin is the more powerful player pulling the strings).

Dec 16: A stuffy, but insightful, and non-Kremlin-friendly, essay by Lev Gudkov, Levada’s founder, on The Nature of Putinism (in Russian).

Dec 15: Attitudes towards the West remain in a deep rut, its conduct during the South Ossetian War having left an irreparable cleft. Regarding the US, despite the election of Obama, Russia’s attitudes towards the US are today about as favorable as in November 1999, after the NATO bombing of Serbia (however, the depth of the animosity should not be exaggerated; for real anti-Americanism, one can do little better than stroll through the “Arab street” in the Middle East”).

Attitudes towards the EU are also on a long-term secular decline, though the slope is much less steep than for the US.

Attitudes towards Georgia remain highly negative, which is not surprising given the Georgian President Saakashvili’s deepening megalomania. Equally not surprising is that Belarus under Bat’ka remains far more popular than Ukraine, as demonstrated in this comedic song about “cutting off Ukraine’s gas“.

Dec 7: A majority of Russians support, to some extent, the slogan “Russia for Russians!“, though there hasn’t been any major upward trend in the past decade. So the theme about the uniquely prevalent nature of Russian racism should not be overplayed.

Also, 61% believe the state should check unrestrained migration into Russia, and 35% do not feel too comfortable about the influx of foreign laborers from the “Near Abroad”. Neither of these have seen major changes in the past decade.

Nov 26: Very detailed historical information on approval ratings for Russia’s political forces – as of November 2009, President Medvedev had 74%, PM Putin had 79%, and the government had 50%. The economic crisis made nary a dent.

Furthermore, more Russians than not think Russia is moving in the right direction – again despite the crisis. This should all give pose to those who say that Putin’s popularity and Russia’s recent turn towards greater self-confidence was based exclusively on high oil prices and economic growth.

Nov 25: 63% of Russians think the situation in the North Caucasus is tense, but 64% believe it will remain stable during the next year. On the 15th anniversary of the First Chechen War, 43% think the Russian government was correct in its use of force to bring it to heel, whereas 11% believe it should have been granted full independence.

Nov 20: Russia extends its moratorium on the death penalty, despite that most Russians support it.

What is the main point of the death penalty for Russians?

However, for some classes of crimes support for the death penalty is significantly higher than when the question is asked in a more general way.

Some 47% of Russians would feel personally safer if they reintroduced the death penalty, whereas 39% disagree.

Nov 18: Perceptions of subjective wealth have improved in Russia over the past decade, along with salaries and pensions. Today, far more shopping is done in big stores and supermarkets than a decade ago, whereas buying stuff on the streets is rarer. Again, not surprising given its economic growth.

Below is a more detailed breakdown.

Nov 6: Russia’s attitudes on the 20-year anniversary of the fall of the Berlin Wall – 63% are positive, and only 11% are negative.

Nov 5: The Russia-Ukraine relation in detail, at the level of peoples rather than governments.

What do Russians think about Ukraine, and Ukrainians about Russia?

However, given the choice most Ukrainians would prefer (re-)integration into Eurasia than Westernization. Only 17% of Ukrainians would have voted to join NATO in October 2009, whereas 63% were against. Furthermore, 55% of Ukrainians prefer a union with Russia and Belarus, compared to 24% who would prefer accession to the European Union.

This is one of the main reasons why it is likely that some kind of Eurasian Empire – be it an EU-like confederation or neo-Soviet Union – will be slowly but surely resurrected in the near future (as is indeed already happening).

Nov 5: What is your opinion on the October Revolution for Russia’s peoples?

Oct 29: Only 4% of Russians celebrate Halloween.

Oct 27: Most Russians believe Putin represents the interests of the siloviks (27%), middle class (24%), oligarchs (22%), simple folks (21%), and his close friends (18%).

Oct 23: 71% of Russians believe they need a serious opposition party, while 47% believe that no such parties currently exist (38% disagree).

Oct 15: Russians on democracy – a series of very detailed and telling graphs.

33% believe Russia has some kind of democracy, another 33% think its democracy has not yet become firmly grounded, while 20% believe it is regressing. As of June 2009, some 57% believed Russia needs democracy, while 26% disagreed – these figures are changed from 66% and 21% respectively in June 2005.

According to the polls below, it seems that Russians have recently come to truly believe in “sovereign democracy“.

As of 2006, around 63% of Russians are basically “statists” – they believe the state should care about all its citizens and guarantee a fitting standard of living, whereas only 25% subscribe to the classical liberal position that the state should limit itself to setting and enforcing the “rules of the game”, and an even smaller 4% take the neoliberal view that government should minimize its involvement in its citizens’ economic affairs. These figures are changed from 71%, 19%, and 6% respectively, in 2001.

Most Russians support a strong, centralized Presidency, and in contrast to the late Soviet period, support for what could be called “authoritarianism” has risen.

The share of Russians believing that Russia’s rulers only look out for their “material wellbeing and career”, which once hovered at 50-60%, has since 2007 fallen to 20-30% – nearly equalizing with those thinking it is a “strong team of politicians, leading the country along the right road”. This is yet another illustration of Russia’s recent, quasi-spiritual transition from “poshlost” to “sobornost”.

At the same time, the number of Russians considering themselves to be “free” in their society has increased under the Putin years. In 1990, 38% of Russians felt society had too little freedom, 30% enough freedom, and 17% too much freedom; in 1997, these figures were 20%, 32%, and 34%; in 2008, they were 18%, 55%, and 20%, all respectively. Ironically, the (perceived) decline in liberalism since 1998 has been accompanied by greater democratization, in that the state has moved closer to the “people’s will”.

Only a tiny minority of Russians, 2-3%, – interestingly, the same percentage that voices approval for Russian “liberals” like Kasparov and Illarionov - have ever regarded Western-style democracy as a necessary “savior” of Russia – many have the practical attitude that it has many useful things to offer (45% in 2008), or that it is not suitable for Russia (30%) or outright dangerous (12%).

All in all, this is all in stark contrast to the Western media theme that Putin, the tyrant, is forcefully re-submerging an unwilling populace back into its totalitarian past. See Armageddon, Putvedev is Russia’s White Rider, and Russia’s Sisyphean Loop for detailed discussions of these phenomena and trends.

Oct 9: Russia’s opinions on the US BMD program (ballistic missile defense). Whereas only 8% think the European installations are being built to defend against Iran, some 69% of Russians believe that it is to ensure its military superiority over Russia, pressure Russia geopolitically, or defend against Russian nuclear attacks.

Regarding America’s plans to postpone the European BMD sites, some 41% think it is a temporary concession, 16% think it’s just a move in a geopolitical “trade” between Russia and the US – while only 21% consider it a “victory” of Russia. The vast majority of Russians believe that the US will continue with its ABM program.

In other words, Russians are cynical about US intentions – and almost certainly correct to be so.

Oct 1: Russians have a great deal of skepticism towards the 1993 bombing of the Duma in Moscow – they perceive it as being evidence of purely inter-elite struggles, a sign of national decline, etc. Some 81% of Russians say both were wrong, both were right, or N/A.

Sept 8: After a peak in 2002, TV viewership is on a slow decline in Russia, especially amongst the young who have the Internet. However, it remains extremely prevalent, with 86% watching it daily or almost daily.

Sept 4: A slim majority of Russians do not consider Stalin to be a “state criminal”, or mostly responsible for the repressions of the 1930′s-50′s. Around half consider the USSR had some resemblances to Nazi Germany, whereas another half disagree. This illustrates the highly binaried view of Russian society towards Stalin – the despotic Messiah who led and ruled them like the God of the Old Testament.

Whereas 55% of Russians think it important to improve relations with Japan, especially in the sphere of hi-tech, most of them (82%) are against doing this by handing over the southern Kurils.

Sept 3: Around 70% of Russians support 1) the teaching of subjects at elementary schools in non-Russian languages and 2) the teaching of the controversial course “The Foundations of Orthodox Culture”.

Aug 31: A majority of Russians continue going out to pick mushrooms at least once per year.

Aug 26: The best Russian films of the last decade: The 9th Company, The Barber of Siberia, Admiral, Island, Twelve, Taras Bulba, Night Watch, The Turkish Gambit, The Irony of Fate 2, Brother, Love – Carrot, Bastards.

The 63% of Russians expecting a “second wave” of the economic crisis during autumn 2009 were wrong.

Aug 24: In July 2009, some 34% of Russians supported the Molotov-Ribbentrop Pact (the August 23, 1939 non-aggression treaty between Nazi Germany and the USSR), 23% condemned it, and 44% didn’t really know or care. Attitudes towards it seem to correlate with those towards Stalin.

Aug 17: Russians are thoroughly disillusioned with the events of the August “Putsch” of 1991, in whose aftermath the USSR collapsed – 42% think it was nothing more than an intra-elite struggle for power, 33% consider it a tragic event with ruinous consequences for the country and people, and just 9% believe it to have been a victory of democracy over the Communist Party.

Aug 7: The increasing penetration of electronic devices in Russia. Do you have a cell phone?

Do you use a personal computer? (yes if once a month or more; no if less than once per month).

The latest Levada figures show that 25% of Russians use email.

Jul 27: On the 10-year anniversary of Putin’s power, Russians credit him most with: increasing life quality, salaries, and pensions (22%); economic development (17%); raising optimism about the country’s future (9%); restoration of order and political stability (8%); and the strengthening of Russia’s international standing (5%).

Jul 20: Contrary to some opinions, around 67% of Muscovites approved of the closure of the Cherkizovsky market (20% disapproved).

Jul 1: Putin is most popular in Russia, India, China, and Ukraine; and unpopular in the West and “moderate” Islamic nations.

Jun 30: Some 45% of Russians are opposed to selling Iran nuclear and missile technologies, while 29% don’t mind. As for North Korea’s nuclear program, 70% of Russians prefer to curtail it via diplomatic negotiation or sanctions.

On the occasion of Barack Obama’s visit to Moscow, 57% of Russians thought relations hadn’t improved from the Bush-era nadir, and 55% are against cuts in their nuclear arsenal (bearing in mind that Washington is working on ABM).

Jun 25: Though only 5% of Russians tried drugs and 18% know of friends or relatives who tried drugs, almost all – 97% – consider it to be a serious problem in Russia. Another 65% believe that trying a drug just once may have the potential to create an addiction. (However, Russia’s drug laws are surprisingly liberal, given the conservative attitudes described above).

Jun 19:  Why were Soviet losses during the Great Patriotic War significantly higher than Germany’s?

Jun 10: Russia’s friends and enemies – countries scoring more than 30% are highlighted. Friends: Belarus, Kazakhstan, China, Germany, Armenia, India, Cuba, Azerbaijan, Kyrgyzstan, Uzbekistan, France, Tajikistan, Bulgaria, Venezuela, Italy. Enemies: Georgia, USA, Ukraine, Latvia, Lithuania, Estonia, Poland, Afghanistan, Iraq, Iran, Germany, Japan, Israel, China, Romania.

May 18: Russians’ opinions about the Unified State Exam.

May 5: 63% of Russians celebrate Victory in the Great Patriotic War, and the same percentage think the USSR could have won the war without Allied help (27% disagree).

Apr 29: Another 57% celebrate May 1st, the labor holiday.

Apr 17: The 2008-09 economic crisis had a far smaller effect on Russians’ wellbeing than the 1998-99 crisis. While the percentage of the population barely making ends meet went up from 29% in July 1998 to 40% in December 1998, this figure remained stable at around 10% throughout the recent crisis.

The main shift occurred amongst Russia’s “consumer class” (the ones who buy cars, PC’s, etc), whose percentage of the population tumbled by a quarter from 19% to 14%, and perhaps explains the reason for its large drop in GDP for 2009. The silver lining is that this implies inequality has decreased during the crisis.

Mar 30: Opinions are highly split regarding conscription and the Army. 47% of Russians would like to retain mandatory military service, whereas 43% would prefer a full transition to a contract army.

If someone in your army was obligated to perform mandatory military service, would you rather they served, or searched for ways to avoid it?

Rather surprising, perhaps, considering the Russian Army’s reputation for hazing (dedovschina). However, its severity may have declined in the past few years, what with the shortening of the term of service from 2 years to 1 year by 2008 – this automatically removed the “grandfathers” from the barracks (conscripts doing their last half-year of service), who tended to be responsible for the worst abuses. Add in the increase in patriotic propaganda and the start of efforts to repress hazing, and this may explain the recent social “rehabilitation” of military service.

Mar 3: More military questions and answers. Does Russia face a military threat from other countries?

Is the Russian Army currently capable of defending the nation in the case of a real war threat from other countries?

Hope you enjoyed browsing through these!

За нас за вас и за десант и за спецназ! The Red Army was the single greatest contributor to the defeat of Nazi Germany sixty-four years ago, a truly evil empire based on slavery and oppression, and responsible for the genocide of millions of Slav civilians, Jews, Soviet POW’s and Roma by gas, bullets and starvation.

Yet ever since the first days of the Cold War, there has been a concerted campaign to whitewash the Wehrmacht of participation in war crimes and to rehabilitate the generals who participated in it as enthusiastically as Hitler and the upper echelons of the Nazi Party. This resulted in the promulgation of many poisonous myths about the Eastern Front that are only now being laid to rest. I already wrote about several of these myths in my Top 10 Russophobe Myths

MYTH I: Heroic Americans with their British sidekicks won World War Two, while the Russian campaign was a sideshow.

REALITY: Although Western Lend-Lease and strategic bombing was highly useful, the reality is that the vast majority of German soldiers and airmen fought and died on the Eastern Front throughout the war.

Rüdiger Overmans in Deutsche militärische Verluste im Zweiten Weltkrieg estimates that from the Polish campaign to the end of 1944, 75-80% of all German armed forces personnel died or went missing in action on the Eastern Front up to the end of 1944. According to Krivosheev’s research, throughout the war, the vast majority of German divisions were concentrated against the Soviet Union – in 1942, for instance, there were 240 fighting in the East and 15 in North Africa, in 1943 there were 257 in the East and up to 26 in Italy and even in 1944 there were more than 200 in the East compared to just 50 understrength and sub-par divisions in the West. From June 1941 to June 1944, 507 German (and 607 German and Allied) divisions and 77,000 fighters were destroyed in the East, compared to 176 divisions and 23,000 fighters in the West. The two pivotal battles, Stalingrad and El Alamein, differed in scale by a factor of about ten.

This is not to disparage the Western Allied soldiers who fought and died to free the world from Nazism. In particular, the seamen who enabled Lend-Lease, at high risk of lethal submarine attack, to transport indispensables like canned food, trucks and aviation fuel to Russia, possibly played a crucial role in preventing its collapse in 1941-42. And the bomber crews massively disrupted Germany’s war potential at the cost of horrid fatality ratios, significantly shortening the war (albeit it is currently fashionable to castigate them for killing 600,000 people who by and large had no problem with waging a war of extermination responsible for tens of millions of deaths on the Eastern Front).

MYTH II: The Russians just threw billions of soldiers without rifles in front of German machine guns.

REALITY: The vast majority of German soldiers were killed, taken POW or otherwise incapacitated on the Eastern front. The Soviet to Axis loss ratio was 1.3:1 and the USSR outproduced Germany in every weapons system throughout the war.

According to meticulous post-Soviet archival work (G. I. Krivosheev in Soviet Casualties and Combat Losses), the total number of men (and in the Soviet case, about 1mn women) who passed through the armed forces of the USSR was 34,476,700 and through Germany’s was 21,107,000. Of these, the “irrevocable losses” (the number of soldiers who were killed in military action, went MIA, became POWs and died of non-combat causes) was 11,285,057 for the USSR, 6,231,700 for Germany, 6,923,700 for Germany and its occupied territories, and 8,649,500 for all the Axis forces on the Eastern Front. Thus, the total ratio of Soviet to Nazi military losses was 1.3:1. Hardly the stuff of “Asiatic hordes” of Nazi and Russophobic imagination (that said, also contrary to popular opinion, Mongol armies were almost always a lot smaller than those of their enemies and they achieved victory through superior mobility and coordination, not numbers).

The problem is that during the Cold War, the historiography in the West was dominated by the memoirs of Tippelskirch, who wrote in the 1950’s citing constant Soviet/German forces ratios of 7:1 and losses ratio of 10:1. This has been carried over into the 1990’s (as with popular “historians” like Anthony Beevor), although it should be noted that more professional folks like Richard Overy are aware of the new research. Note also that cumulatively 28% and 57% of all Soviet losses were incurred in 1941 and 1942 (Krivosheev) respectively – the period when the Soviet army was still relatively disorganized and immobile, whereas for the Germans the balance was roughly the opposite with losses concentrated in 1944-45.

The idea that there were two soldiers for every rifle in the Red Army, as portrayed in the ahistorical propaganda film Enemy at the Gates, is a complete figment of the Russophobic Western imagination. From 1939 to 1945, the USSR outproduced Germany in aircraft (by a factor of 1.3), tanks (1.7), machine guns (2.2), artillery (3.2) and mortars (5.5), so in fact if anything the Red Army was better equipped than the Wehrmacht (sources – Richard Overy, Why the Allies Won; Chris Chant, Small Arms).

MYTH III: Though the Wehrmacht fought with honor and dignity on the Eastern Front, the Russians killed all the German POW’s and raped and looted east Germany when they conquered it.

REALITY: The Great Patriotic War was an absolute war that was more brutal than anything seen in the West by orders of magnitude throughout its entire length. The hundreds of thousands German civilian and POW deaths at Soviet hands, though tragic, pale besides the up to 15-20mn Soviet civilian dead and the 60% mortality ratio of Soviet POW’s in German camps. Set against these numbers, the Red Army rapes in east Germany seem almost irrelevant.

One of the greatest crimes in Western Europe was the massacre of Oradour-sur-Glane, in which 642 civilians were murdered by a Waffen-SS battalion. But just one region in the East, Belarus, with 20% of France’s population, experienced the equivalent of more than 3,000 Oradours – some 2,230,000 people were killed in Belarus during the three years of German occupation, or a quarter of its population. At least 5,295 Belorussian settlements were destroyed by the Nazis and more than 600 villages like Khatyn were annihilated with their entire population under the cover of anti-partisan operations.

A poignant memorial to Nazi genocide in Khatyn - the one flame among three birch trees symbolizes the quarter of the Belarussian population who died in 1941-44.

Furthermore,

The Russian Academy of Science in 1995 reported civilian victims in the USSR at German hands, including Jews, totaled 13.7mn dead, 20% of the 68mn persons in the occupied USSR. This included 7.4mn victims of Nazi genocide and reprisals; 2.2mn deaths of persons deported to Germany for forced labor; and 4.1mn famine and disease deaths in occupied territory. There were an additional estimated 3.0 million famine deaths in the USSR not under German occupation.

This was all part of a Nazi scheme, Generalplan Ost, which called for the extermination of the Slavic intelligentsia and most of their urban populations, as well as the helotization or exile to Siberia of their peasants. Confirmed by internal documents and numerous quotes from high Nazi officials:

The war between Germany and Russia is not a war between two states or two armies, but between two ideologies–namely, the National Socialist and the Bolshevist ideology. The Red Army must be looked upon not as a soldier in the sense of the word applying to our western opponents, but as an ideological enemy. He must be regarded as the archenemy of National Socialism and must be treated accordingly. — General Hermann Reinecke

We must break away from the principle of soldierly comradeship. The communist has been and will be no comrade. We are dealing with a struggle of annihilation. — Adolf Hitler

Some 3.3mn Soviet POWs died in the Nazi custody out of 5.7mn (USHMM), the vast majority of them from July 1941 to January 1942 (i.e. when the Germans still thought they’d win quickly so no consequences for their own POW’s). This death rate of around 60% can be contrasted with the 8,300 out of 231,000 British and American prisoners who died (3.6%) in Nazi hands, or even the 580,548 out of 4,126,964 Axis servicemen who died as Soviet POW’s (Krivosheev), that is around 15%. (The question of how many German POW’s died in Western camps is hotly disputed. Though they ostensibly followed the Geneva conventions and cited numbers are typically low, of the roughly 1,000 U.S. combat veterans that historian Stephen Ambrose interviewed, roughly 1/3 told him they had seen U.S. troops kill German prisoners. The controversial historian James Bacque claims that Allied Supreme Commander Dwight Eisenhower deliberately caused the death of 790,000 German captives in internment camps through disease, starvation and cold from 1944 to 1949, and that 250,000 perished in French camps in similar conditions).

The Red Army gets bad press for its behavior during the final invasion of Prussia, in which they are frequently described as drunk looters and rapists. The consensus seems that although formal orders were against such activities, in practice most turned a blind eye to it. Yet while tragic, it is completely understandable and does not deserve the centrality placed on it by too many anti-Communist (or frequently plain Russophobic) pseudo-historians.

Consider what the typical Red Army soldier experienced before getting to Berlin: years of brutal fighting with a very high risk of death and almost certain to be wounded one time or another; hearing the stories of murdered Soviet POW’s; the sight of thousands of burned villages and massacred women, children and old men in Western Russia, Belarus, Ukraine and Poland; the death camps of Auschwitz and Treblinka; and finally, the (seemingly) decadent luxury of the conditions in which German citizens themselves lived (who, let us not forget, democratically elected Hitler and who with just a few honorable exceptions like the White Rose passively or even enthusiastically accepted Nazism).

This was, in the words of German leaders themselves, a war of extermination. Set against German atrocities in the East, or even the frequently brutal postwar ethnic cleansing of millions of Germans from countries like Poland and Czechoslovakia, it is at best wrong-headed and at worse racialist in the Nazi style to give such centrality to the rape of Berlin.

One more myth. Many accounts allege that the Soviets sent all their returned POW’s to the Gulag, if they didn’t shoot them for treason. Actually, according to Krivosheev, 233,400 were found guilty of collaborating with the enemy and sent to Gulag camps out of 1,836,562 Soviet soldiers that returned from captivity.

MYTH IV: The mainstream Western narrative on the Eastern Front during the Second World War was formed by academic historians and is fundamentally fair and objective.

REALITY: The exigencies of the Cold War, coupled with traditional US anti-Communism, meant that many Americans sympathized with the German narrative of the war. In particular, the Wehrmacht officers talked, networked and wrote about how the German military was not complicit in Nazi war crimes so as to cement West Germany (not to mention their own careers) into the Western alliance on equal terms. The complexities and compromises of military involvement in genocide in the East was whitewashed into a kitschy image of the German soldier as a patriot braving the odds to defend family and Heimat from the Bolshevik hordes. The US military and politicians were just fine with this, because they faced an ideological struggle and possible land war with the Soviet Union. Though there is serious and reasonably objective Western academic work on the Eastern Front, popular culture is still dominated by German memoirs and a-historical romanticizers.

I’ve long been skeptical about the way Russians were portrayed in accounts of WW2. Although some (generally recent) work is sympathetic and appreciative of the combat capabilities of the Red Army (e.g. Chris Bellamy), most stress the German side of the conflict. The latter typically distinguish themselves by traits like: admiration for the supposed brilliant of German generals like von Manstein and Guderian, who’d have won if not for Hitler’s interference; constant reference to the supposed vast numerical superiority and callous disregard for casualties of the Soviets; emphasize “Russian” war crimes (offensives, etc, are however “Soviet”), while attributing all German crimes to “Nazis”, usually focusing on groups like the Einsatzgruppen and SS and avoiding discussing Wehrmacht complicity, etc.

Thankfully, two authors, Ronald Smelser and Edward J. Davies, recently wrote a book, The Myth of the Eastern Front: The Nazi-Soviet War in Popular Culture, which finally collates and authoritatively confirms these strong suspicions about the objectiveness of Western popular historiography on the subject into an accessible, well-argued narrative. Most of what follows is drawn directly from the book, in chronological order.

1) Deep Ambivalence. Before WW2, many Americans had deeply ambivalent attitudes towards the Soviet Union. Though bloggers generally consider the Russophile-Russophobe dichotomy in contemporary terms, this division was as stark and relevant in the 1930′s – John Scott in Behind the Urals (BTW, though considered by some a Soviet apologist, it is in fact fairly objective and certainly not a pro-Soviet propaganda tract by any stretch of the imagination) writes, “In talking with people in France and America I was impressed by the interest in the Soviet Union and the widespread misinformation about Russia and all things Russian. Everyone I met was opinionated [aren't we all lol!]. The Communists and their sympathizers held Russia up as a panacea…Other people were steeped in Eugene Lyons’ stories and would not concede the possibility that Russia had produced anything during recent years except chaos, suffering and disorder. They dismissed the industrial and material successes of the Russians with an angry wave of the hand. Any economist or businessman should have been able to see that the tripling of pig-iron production within a decade was a serious achievement, and would necessarily have far-reaching effects on the balance of economic and therefore military power in Europe”. So basically there was (much like today?) a hardcore Communist / Russophile fringe, a sizable anti-Communist bloc and a majority that were mostly apathetic but overall disapproving.

2) War and Friendship. The exigencies of war against a common enemy, Nazi Germany, necessitated a rehabilitation of the Soviet Union in American eyes. In contrast to the “dirty, ignorant, brutalized peasants of Nazi mythology” and traditional stereotypes of Russians as “mechanically inept and stupid”, Americans began to emphasize the scale of industrial modernization in the Soviet Union, their growing religiosity (helped by Stalin’s rehabilitation of the Church) and their focus on family – according to Life Magazine, Russians now “look like Americans, dress like Americans and think like Americans”. The Red Army was lauded for its growing technical and operational competence, with its soldiers portrayed as decent, ordinary folks defending their families and Motherland from Nazi depredations, who did not want to die but were not afraid to do so if called upon. Americans built “bridges” to ordinary Soviet workers such as writing letters to people in similar occupations and organizing humanitarian relief efforts to supply food and consumer durables to needy Russians. As the war drew to a close, even the American population, which suffered relatively few war casualties and whose homeland remained untouched, thirsted for vengeance. Tentative plans (Morgenthau Plan) were drawn up for the coercive deindustrialization of Germany and its fragmentation into several demilitarized states – according to the aforementioned James Bacque, parts of this plan were actually carried out after 1945 though gradually eased in the late 1940′s as the US realized it needed a strong German ally during the Cold War.

3) Inversion of History during the Cold War. Aided by traditional American ambivalence towards Bolshevism and Slavs in general, memories of Russian friendship froze over under the emerging Cold War, to be “replaced by a pro-German version, one that stressed Russian atrocities, German heroism, and even a superhuman sacrifice to defend Western culture from the Eastern hordes”. From the 1950′s Americans became very receptive to the German view of the conflict (as constructed by the German officers who wanted to rehabilitate the Wehrmacht from complicity in war crimes so as to set the new Bundeswehr and the Western alliance in general on firmer footing), viewing the German soldier as a simple patriot in a Romantic “lost cause” defense of family, Church and Fatherland from red tyranny. Though the prospect of a land war with Russia is long gone, this romantization continues unabated, little affected by academic research from the 1970′s which questioned the myth of the “clean Wehrmacht” and the opening up of Russian archives and personal accounts in the 1990′s.

However, as covered above much of this narrative was simply false. As early as November 1942 the USSR assembled the Extraordinary State Commission to examine German war crimes, with early trials held in Kharkov and Krasnodar. The complicity of the German generals in atrocities emerged in the postwar Nuremberg Trials, in which military men Keitel and Jodl were hanged for planning aggressive war and participating in crimes against humanity, incriminated by their signatures on things like the Commissar Order (immediate execution of all captured Communist military commissars), the Jurisdictional Order (suspending traditional military laws on proper conduct of troops in the Eastern Front), the Hostage Order (allowing for the killing of 50-100 hostages for every German soldier killed by Soviet partisans), the Night and Fog Order (allowing for disappearance of undesirable elements in the occupied territories) and the Commando Order (immediate execution of captured commandos behind German lines).

According to Rode, major-general of the Waffen-SS, “the military commanders…were thoroughly cognizant of the missions and operational methods of these units. They approved of these missions and operational methods because, apparently, they never opposed them”, and admitted that it was clear to him that “anti-partisan warfare gradually became an excuse for the systematic annihilation of Jewry and Slavism”. To the US prosecutor Rapp, who was conducting trials of German military personnel, a key concern was the “prevention of legends” about the non-complicity of the German military in war crimes, lest they again retain their reputation, as after WW1, as “gracious, old, highly educated fine gentlemen”. Ironically, this is exactly what happened in the 1950′s.

Many Americans found it hard to rationalize German atrocities. The original US GI’s who liberated Western Europe were replaced by new soldiers who hadn’t fought Germans, loved the German hospitality, generally held them blameless and even accused their superiors of anti-German propaganda. This fed into deep-seated American attitudes, which were common to much of the West, of anti-semitism, antislavism, and cultural prejudices against the East in general. Germans with their Church, families and similar material culture looked more wholesome than the Russians, who were perceived to be arrogant and crude unlike the newly subservient Germans. The Germans reinforced these perceptions with stories of Russians as cruel, bestial sexual predators. Policies on interacting with German civilians were gradually loosened in the US, whereas in the Soviet occupied zone they were tightened from 1947 when Red Army soldiers in East Germany were confined to their barracks.

With the Cold War heating up, first with the Berlin airlift and then with the Korean War, the Americans realized they needed the Germans as friends instead of as prostrate slaves or even clients. Similarly, the former Wehrmacht officers wanted to rescue their careers, continue the good struggle against Bolshevism to preserve Western civilization, and to salvage the reputation of the German officers corp. Under American auspices they started re-writing history with three main goals – 1) establish a “lost cause” myth of the German military as honorable, apolitical and supremely competent, serving Fatherland not Führer, 2) advise the Western Alliance on how to win a land war with the USSR and 3) dehumanize Russians in the interests of Cold War solidarity.

This process can be illustrated in the life story of Franz Halder, a German general who became chief of the Operational History (German) Section, a project that collated some 2,500 lengthy manuscripts from 700 former Wehrmacht officers that were tightly edited to fit the three goals above. In his 1949 work Hitler als Feldherr, Halder made the following points: a) he didn’t support war against the USSR, b) didn’t lay plans for an attack on the USSR before Hitler ordered him to, c) was concerned about a pre-emptive Soviet strike, d) was unaware of the racial nature of the war as envisaged by Hitler, e) didn’t participate in POW or civilian genocide and f) was skeptical about Hitler’s assumptions of easy, early victory. Yet his personal war diaries tell a somewhat different tale.

a) The German military had been thinking of expansion and continental hegemony since at least the middle of the First World War. See the “Great Plan” of 1924-25 which called for Teutonic hegemony in Europe, albeit it had not yet been based on explicitly racialist terms. It was resurrected after the Sudetenland crisis of 1938.

b) After the defeat of France in May 1940, Hitler was considering large-scale demobilization, but Halder wanted a war with the USSR and had his staff draft “Operation Otto”, a precursor to Barbarossa, on his own initiative in June 1940.

c) In February 1941, Halder felt a Soviet attack was “completely improbable”.

d) Under a heading in his diary tellingly entitled “Colonial tasks”, he wrote, “We must forget the concept of comradeship between soldiers. A Comrade is no friend before or after the battle. This is a war of extermination. If we do not grasp this, we shall still beat the enemy, but 30 years later we shall against have to fight the Communist foe…This war will be very different from the war in the West. In the east, harshness today means lenience in the future. Commanders must make the sacrifice of overcoming their moral scruples.” In the margin, he added, “embody in the ObdH (Army High Command) order”.

e) The reality of the war in the East became clear after the invasion of Poland, when the SS and Security Police started annihilating the Polish intelligentsia. Though many German officers expressed reservations, non were forthcoming from Halder or von Brauschitsch. Later, he actually negotiated responsibilities for maintaining order in the front and rear with Einsatzgruppen commanders, and knew of and was completely indifferent to Soviet POW deaths. His own staff drafted the aforementioned Commissar Order and Jurisdictional Order – in effect, the German military high command translated the views of leading Nazis into policy. Though some officers like Hassell objected, the vast majority went along with the generals.

f) Halder more than shared Hitler’s optimism, considering the Germans would need just 80-100 divisions against an estimated 50-75 Soviet. (Ultimately, 152 German divisions were unleashed in Barbarossa against what were actually more than 300 Soviet divisions). Since progress was initially smooth, he constantly revised the timescale of victory down – “not even Hitler was as confident as his generals”.

You can tell you’re damning yourself when you give off such a strong impression of mendacious duplicity that you almost  portray Hitler in a good light. And funnily enough the Führer presumably shared this impression – he bribed his generals by secretly doubling their salaries, conditional on their loyalty and obedience. Though a mitigating factor is that Halder was arrested for suspected involvement in the July 1944 bomb plot against Hitler, it should be noted his accommodations and provisions were quite OK (certainly far from death camp rations) and it was only in January 1945 that he was formally dismissed from the military. One gets the idea that the opportunist was simply hedging his bets, for by that time the war was already obviously lost. According to Smelser / Davies, “Franz Halder embodies better than any other high German officer the dramatic difference between myth and reality as it emerged after World War Two, particularly with regard to the war in the east”.

Though under suspicion of being a war criminal, he was officially released from Western Allied custody in 1947. He ingratiated himself with the US Army and was made chief of Operational History (German) Section in summer 1948 – the aforementioned project to rewrite history by rehabilitating the Wehrmacht and cementing Germany into the Western alliance (not to mention rescuing the careers of former Wehrmacht officers). In October 1948 he was tried by a German denazification court and was cleared. The prosecution then got hold of his incriminating war diaries and demanded a retrial, but by then the Americans had taken him under their wings, claiming him as indispensable. The court was forced to throw out all further charges in 1950.

As director of this project, he solicited and vetted some 2,500 manuscripts from 700 former Wehrmacht officers, by now a mix of serving Bunderwehr officers, celebrity veterans and suspected war criminals. Many of them transliterated Nazi mythology on Russians for an American audience – Halder himself wrote, “frequent insensate cruelty is found coupled with attachment, fidelity and good nature under proper [presumably Germanic?] handling”; many were worse, citing the supposed bestial, cruel, morose, instinctual and primitive nature of the Red Army soldier (though they lauded him for bravery). The more important part of the project however was teaching how to win, or at least not lose, a land war to the Soviet Union. German officers criticized American plans to mount a line defense on the Rhine, instead stressing the “mobile defense” concept developed by von Manstein in 1943-44. They also pointed to the importance of military education, training and officer independence to their military successes.

Given such valuable information and propaganda material, the Americans gave the former Wehrmacht officers leeway to further their careers and whitewash their war records. Einsenhower flip-flopped from writing things such as “the German is a beast” to his wife in 1944, to apologizing to Wehrmacht officers for defamation, claiming by the early 1950′s that “I do not believe the German soldier as such has lost his honor”. General Matthew Ridgeway urged pardons for war crimes committed on the Eastern Front (only!), with the curious justification that he had issued the same orders in Korea for which the German generals were rotting in jail for. And although the Red Scare was passing away by the mid-1950′s, by this time the myth of the “lost cause” – patriot Germans fighting for family and Heimat against the Bolshevik hordes – was fast becoming entrenched.

German officers networked with Americans. German generals, gracious, old, highly educated fine gentlemen like Guderian and von Manstein (both of whom knew of Hitler’s plans for the Soviet peoples), published self-serving memoirs. From the 1970′s, they would be further supplemented by popular accounts of the Eastern Front from ordinary German soldiers, showing their human side. Reenactments became popular, in which enthusiasts combined a painstaking attention to historical detail like uniforms and ranks with a plain painful minimal attention to placing their heros in the larger historical context of Wehrmacht complicity in Nazi crimes.

Though academic historians from the 1970′s increasingly challenged this narrative, the popular culture was unaffected, having long since been taken hostage by images of Stuka dive-bombers and Tiger tanks and the writings of the German generals. It took until the last ten years or so, with the popularization of this more academic work, as well as the opening of the Soviet archives and accounts from the Russian side, to add greater perspective. Yet as the myths above prove, there is still lots of work to do – not least, fully exposing the distorted historiography of the Great Patriotic War to the general public.

To close this with an idea – there are many, many Russian accounts and memoirs of the war, but too many of them remain untranslated into English. This is unacceptable and we should look into ways to change this state of affairs. Suggestions?

Sources
R. Overmans. Deutsche militärische Verluste im Zweiten Weltkrieg
G. I. Krivosheev. Soviet Casualties and Combat Losses
R. Smelser & E.J. Davies. The Myth of the Eastern Front: The Nazi-Soviet War in American Popular Culture.

However, this was most certainly not a Russian victory, as RFE noted:

There would be no MAP at this time, that was true. But there would be what sounded like a pretty firm commitment of eventual membership. Not a firm commitment for MAPs — but actual membership. All the key players who famously opposed the MAP this time around were on board, including Germany and France. Moreover, NATO foreign ministers have been instructed to assess Kyiv and Tbilisi’s progress in December 2008 and have authority to issue formal MAPs as early as then — provided the progress was sufficient. It would all be in an official protocol by the evening, we were told. The mood in the Georgian and Ukrainian delegations pivoted on a dime, from bitter disappointment to unexpected elation. Ukrainian President Viktor Yushchenko said Ukraine had “broken the sound barrier.” Georgia’s Mikheil Saakashvili called the announcement a “geopolitical coup.” One top Georgian official, speaking on background, told my colleagues from RFE/RL’s Georgian Service that the decision was even better than getting a MAP. They would be admitted to NATO after all. The only question was when.

The US also got an agreement with the Czech Rep. on the radar station for their missile defence system. Meanwhile, east European countries led by Poland and Estonia have pressed for even more anti-Russian measures.

Yet at its core, the dispute within NATO is about the renewed threat from Russia. Members of “old Europe” may hope to avoid a clash with the Kremlin, but many countries of “new” Europe say the struggle has already begun. For them security lies in expanding the frontiers of what was once the transatlantic alliance to the Black Sea and ultimately to the Caspian.

Even its strongest advocates recognise that such expansion raises questions about the purpose of the alliance: should it be mainly a military organisation, or a political club of democracies? Radek Sikorski, the Polish foreign minister, questioned whether the promise of mutual defence from armed attack enshrined in Article 5 of NATO’s charter was becoming “diluted”.

Mr Sikorski wants NATO to move military infrastructure east. He complains that NATO hesitates even to make intelligence assessments of perils from Russia. Others want more attention to non-conventional threats, given last year’s cyber-attack on Estonia, blamed on Russia. Not that they ever bothered producing evidence. “We do a disservice to Russia by not taking it seriously,” said Toomas Ilves, Estonia’s president.

Putin opted for a pragmatic response, repeating Russian concerns about NATO expansion and missile defence (“an attempt to neutralise, whether immediately or in the future, its nuclear arsenal”), and recommended that a) the radar in Czechia be cemented into the ground, b) switching on the system only when an Iranian or other threat materializes, c) integrating early-warning systems and d) maintaining a constant Russian military presence at the sites. It would be interesting to see what the West, always accusing Russia of non-coperation, will make of these, but the augurs aren’t promising – the eastern Europeans have already objected to the last proposal.

According to rumors, Putin unloosed the rhetoric behind doors, hinting that Russia work to break up Ukraine and extend recognition to Abkhazia and South Ossetia, citing the Kosovo precedent.

President Vladimir Putin hinted at last week’s NATO summit in Romania that Russia would work to break up Ukraine, should the former Soviet republic join the military alliance, Kommersant reported Monday. Putin “lost his temper” at the NATO-Russia Council in Bucharest during Friday’s discussions of Ukraine’s bid to join NATO, Kommersant cited an unidentified foreign delegate to the summit as saying. “Do you understand, George, that Ukraine is not even a state!” Putin told U.S. President George W. Bush at the closed meeting, the diplomat told Kommersant. After saying most of Ukraine’s territory was “given away” by Russia, Putin said that if Ukraine joined NATO it would cease to exist as a state, the diplomat said. Putin threatened to encourage the secession of the Black Sea peninsula of Crimea and eastern Ukraine, where anti-NATO and pro-Moscow sentiment is strong, the diplomat said, Kommersant reported.

Not surprising, Timoshenko and Ukraine’s ambassador to Russia were not impressed. Nonetheless, the fact remains that pro-Russian sentiment is strong in Eastern Ukraine, Crimea was given away to Ukraine by Khrushev in 1954 and NATO expansion closer to Russia’s border cannot be allowed. As Brzezinski pointed, Russia without Ukraine cannot be a superpower. A repeat of the ‘re-gathering of the Russian lands’ is likely. Since all parties in Ukraine have agreed to a referendum on NATO membership, and kicking off the propaga, oops, “information” campaign is going to take time, means Russia still has time.

Redrawing the MAP in Europe by Lucas has a witty title, but is otherwise unremarkable. I do however like the cartoon.

What could this mean? Perhaps Bush, thinking that Russia has imprisoned Ukrainka, is going to charge in and rescue her the obvious and aesthetically pleasing way – pulling on her braid towards him. But heights are dangerous.

Russian Soviet-era dissident novelist Solzhenitsyn took a break from writing his glybs (a joke for those who’ve read Moscow 2042 in Russian) to launch a diatribite against Bush for honoring the so-called Holodomor and ignoring the fight against fascism:

The interview came after Solzhenitsyn unleashed a memorable broadside last week against US President George Bush who, during a two-day visit to Ukraine, laid a wreath at a monument to victims of the great famine of the 1930s, in which millions of Ukrainians died. Ukraine’s pro-Western government has dubbed the catastrophic 1932-33 famine holodomor (literally, ‘death by hunger’). It claims that it was a genocide.

In a vituperative piece, however, Solzhenitsyn dismissed the claim as ‘rakish juggling’ and said that millions of non-Ukrainians also perished in the famine, which was engineered by the Soviet Union’s leadership. ‘This provocative outcry about “genocide”… has been elevated to the top government level in contemporary Ukraine. Does this mean that they have even outdone the Bolshevik propaganda-mongers with their rakish juggling?’ an incensed Solzhenistyn wrote. Bush had been duped by a ‘loony fable’, he added.

And from Russia Today,

This provocative outcry of genocide was voiced only decades later. At first, it thrived secretly in the stale chauvinist minds opposing the “bloody Russians”. Now it has got hold of political minds in modern Ukraine. It seems they’ve surpassed the wild suggestions of the Bolshevik propaganda machine. “To the parliaments of the world” – a nice teaser for the Western ears. They have never cared about our history. All they need is a fable, no matter how loony it appears.”

Just proves how the West, its rhetoric to the contrary, behaves just like any power – it uses you for its own interests, before casually discarding you when you become a political embarassment – a fan of President Vladimir Putin with an increasingly nationalist anti-western tone (perish the thought!). As they say, the Moor has done his duty, he can now go.

Russian govt. expects proposals to improve 2020 development plan, in particular “property rights protection, the development of corporate management, an environment of competitiveness, financial markets, and measures to enhance efficiency of state-owned companies”. As we’ve already reported, “Russia’s president-elect Dmitry Medvedev, who held his first State Council Presidium meeting in the West Siberian city of Tobolsk on Thursday, proposed a ban on unauthorized checks of small businesses”.

Russia should shift highly qualified people from industry to the innovation sectors. Russian banks flooded by foreign billions, forcing efficiency increases on domestic banks and improving access to credit. Russian firms ditch London for Asia for their listings due to booming economies and less stringent disclosure requirements. British supermarket chain Tesco has announced plans to expand in Russia. Increasing numbers of people in Britain are putting their pensions in Russia and other emerging markets – risks are perceived to be higher, but so are returns.

On 6th March the Nikitsky Fund released its always excellent Truth and Beauty (… and Russian Finance), Against Respectability. Here’s a few succulent quotes and comments from their article
Against Respectability – A Rant:

• Viewing the media, we find that respectable commentary follows a well-defined pattern. Anyone who fails to respect an entire herd of sacred cows is quickly consigned to the lunatic fringe. Unlike the Soviet System, modern capitalism silences its critics not with gags and gulags, but by drowning them out with a cacophony of well-targeted info-tainment, asystem far more pernicious than anything Soviet censors could have aspired to (for, unlike the BBC, hardly any educated person believed what he read in Pravda).
• Western-style corruption involves ownership of media by financial interests, government influence over editorial boards, state co-option of senior editorial figures, and occult financial flows. The end result is more pernicious – a well-orchestrated campaign of convergent disinformation, which most readers are too lazy or complacent to penetrate.
• In the BBC/Economist world, there is a select group of countries (Iran, Cuba, Russia…) about which one can say virtually anything – from unbalanced criticism of real ills, to outright slander. A second group (e.g. Singapore, Brazil, Georgia) is susceptible to moderate criticism which must, however be kept credible; finally, even the most savage criminality by a third group (UK, US, EU) if it criticized at all, is discussed in the mildest and most balanced possible terms.
• Why? 1) outright corruption, 2) an attempt to ingratiate themselves with the information-bearers (political leaders, etc) and achieving a sense of belonging to the inner circle that
  these hacks so desperately crave and 3) making up for past mistakes, e.g. the BBC on challenging Blair on Iraq.
• BBC – made a hero out of Khodorkovsky and the Yukos/Menatep gang, claiming they have a massive following in Russia – even going so far as to interview Misha’s parents (but not the parents of those the organization murdered, obviously – that would spoil the mood).
• Financial Times – The FT is caught in the same terrible bind as much of the Western Press – is Russia a weak, spent force to be pitied, or instead, a deadly, looming colossus, to be feared? Unable to decide, they risk ridicule by alternating back and forth between the two… (and yes, it was terribly rude of those Russians to succeed when their betters thought they should fail). Lambasts its agitprop article Why Putin’s rule threaten’s Russia and the west, which fails by proving Godwin’s Law in its first sentence. Then it fails some more by contrasting Russia’s supposedly low growth with other former Soviet countries – an argument I demolished here (funny how all Russophobe articles all trot out the same points. So much for Western “media diversity”. Still, it makes my job easier. Shoot a few holes in one, and they’re pretty much all dead). Next on the list comes Kazakhstan – a thriving, Western style democracy (well, Dick Cheney likes it…maybe ‘cause it smells of oil). Belarus follows (another fine example of democracy in action), then come Tajikistan (don’t you wish you were there?), and the Balts.
• Wolf – predictably – employs the oldest trick in the journalistic book: why bother trying to substantiate a weak argument when you can simply find someone to say it for you –quoting him gives it an aura of “fact” – reporting that is, not mere editorializing! Wolf thus approvingly quotes that “superb scholar” Ander Aslund (he who fatally discredited the Carnegie Endowment by soliciting a large bribe from Khodorkovsky, then shilling for Yukos so egregiously that in the end, even Carnegie had to force him out), the mad, Russophobic Lucas (he who in 1998 predicted, that Russian GDP would collapse, the rouble would go to 10,000/$, while Russia broke up into 4 warring regions), and tired old McFaul, who under Yeltsin was so important, and is now routinely and cruelly ignored. Wolf even stoops to quote the Neocon Freedom House, the home of such luminaries as Wolfowitz, without mentioning that it is a Washington-funded propaganda center.
• While denying Russia’s success becomes exponentially harded year on year, these tools now resort to the myth that a) Russia was doing just fine in 1999 and b) all positive developments since then were despite, not because of, Putin (but heck, even Illarionov disagrees with that last bit!, at least when talking with other Russians). Not to mention that their likes were writing articles like Russia is Finished back in those good old days!
• As anyone who lived here at the time will tell you, this is patent nonsense. At best, Russia had reached some slight degree of stabilization. Save for currency overvaluation, all of the problems which gave rise to the August 1998 collapse were still present – predatory oligarchs, regional Balkanization, budgetary chaos, and a dysfunctional tax system. If one simply reads the stories in Western press from that period, not one of them suggests that Putin would be any more a success than Yeltsin – he was to be nothing more than Berezovsky’s puppet – and Russia was receding back into the third world…so unfortunate that journalists are not obliged to defend their track records!…Eight years later and Russia is stable, wealthy and growing three times as fast as anyone else in the G8; average incomes have increased fivefold, poverty has fallen by 60%, the middle class has more than doubled. Since 2006, birth rates finally started to rise as people finally have enough trust in the future to risk having children.
• Outside the smug and self-centered world of the sunset Western powers, Russia is respected and envied, if not always loved. Much of this was due to one man – “providential” hardly seems too strong a word. And whatever misery T&B still has to endure at the hands of the local bureaucracy, as Russophiles, we are deeply grateful to Vladimir Vladimirovich.

In geopolitics, Russia challenges US in the Islamic world. The Muslim world is no longer a good card for Washington to use against Moscow, in fact it has flipped. Russia is far more popular amongst Muslims than the Great Satan and with just a very few exceptions, no Muslim country recognized Kosovo. This positions it in good stead to build bridges between Islam and the West, or to lever the former against the latter, as it chooses. This is reflected in Russia constructing Saudi Arabian railways, building nuclear plants in Egypt and developing Iraqi oil fields, as well as selling arms to everyone.

As covered in previous News, Russian weapons sales to China fall due to rapid indigenous Chinese progress and Russia’s strategic concerns. Iran: Russia, China Unlikely To Welcome Tehran Into SCO - as long as SCO-US relations don’t deteriorate too much, anyway. Meanwhile, Russian intelligence sees U.S. military buildup on Iran border. The prelude to the Iran Plans, as uncovered by Seymour Hersh; or more posturing? Realistically speaking, however, Iran’s ADGE (Air Defense Ground Environment) is sparse and outdated; the USAF will face few problems conducting surgical strikes on nuclear facilities.

A very cold war indeed – the Guardian has awoken to the new Great Game about to be played out at the top of the world as Canada, Russia, Denmark and the US increase their military presence and claim territory suspected to be rich in hydrocarbons. Meanwhile, Russia has also extended its claims on the Sea of Okhotsk.

In addition to credit and sub prime woes, we are also facing the spectre of the oil peak. I must remind myself to write a more detailed exposition on the topic once the Demographics project is finished and time is freed up; otherwise, read the Futurist’s optimistic take on it and my response.

Meanwhile, we are also facing the end of cheap food, as wheat, corn and rice prices explode, triggering food riots and social unrest throughout the world. This is linked with China’s growing apetite for meat, oil price rises and adverse weather (driven by climate change – my predictions may already be coming true). But preventable and unnecessary factors include America’s biofuels splurge, which a) is very energy inefficient, b) diverts food from the global poor to SUV owners and c) accelerates climate change in a vicious circle.

Disappointing jobs figures offer yet more proof that America is in recession. The Nikitsky Fund report mentioned above has an entertaining (at least for non-Americans) description of the hole it’s in:

Welcome to The Wall Street Mortgage Meltdown

Like the mythical frog lured into complacency as he is slowly boiled to death, Investors are becoming accustomed to a daily flow of news which would have seemed utterly outlandish just a year ago; indeed, T&B was routinely mocked for predicting some of the current carnage – though by no means either the speed of the unwind, nor the extent of the damage.

1. The term “collapse” is being used with increasing frequency when referring to the
world’s erstwhile reserve currency, which – after meeting the initial resistance we predicted at the $1.45 level, the dollar now heading for our second support level – $1.57- 1.60. A classical currency crisis involving the dollar no longer seems outlandish. Investors would do well to treat the constantly renewed reassurances that it has “finally bottomed” with great caution.

2. The Chairman of the US Fed has just warned of the likelihood of collapse of some of the “smaller US banks” (we agree, but fear that for one or more of the bigger ones, it is just a matter of time)

3. When the credit crisis began last August, terrifying stories of overall losses to the banking sector ranging up to $50bn began to circulate. A few months later, Goldmans shocked the market by speaking of eventual losses ranging up to $200bn. Yesterday, UBS (and they should know!) warned that losses to the financial system would total $600bn. We await the next estimate with some trepidation.

4. Large segments of the US credit market have simply shut down – structured finance, high yield, CLOs, and much of the corporate and municipal loan markets. The solvency of the banking sector is no longer taken for granted. Frighteningly, it appears that only a small fraction of the expected damage has already been recognized – a collapse of the conduits and the CDS markets could yet bankrupt much of the financial system.

5. The US housing market is heading into a depression. The famous “nationwide
housing prices have never fallen on a year-on-year basis” has been firmly debunked. Goldmans estimates that prices are crashing at an annualized rate of 18%. As more supply continues to come onto the market due to completions and repossessions, a crisis is developing. According to RMS, if housing prices fall another 10% (ed: and they certainly will) – 20 million US homes will have negative equity value. We are utterly amazed by the inability in Washington to cobble together some sort of a viable rescue plan, as the crisis continues to worsen.

6. Having been aggressively pro-cyclical during the good times, the Bush administration’s legacy will be a Federal Deficit ranging up to $800 bn (source: Bill Gross, Pimco). As further structural factors kick in (lower returns on assets, retiring baby-boomers, underfunded state pensions, increased medical costs) huge cuts in
expenditures and increased taxation are inevitable.

7. The rating agencies have been fatally compromised. Corrupted by the easy money to be made in sweetheart deals with Wall Street Banks, they actively helped to stuff
toxic waste into every corner of the global financial system. By continuing to rate the soon-to-be bankrupt bond insurers triple-A (they must currently pay 1400 bp over Libor for their borrowings, i.e. deeply distressed levels); the agencies have forfeited any last remaining pretense to independence or credibility.

8. The childlike faith of international financiers in the safety and stability of the US dollar and US financial assets in general, has now imperiled the very survival of some of their institutions. This faith will not be restored. The dollar-centric system is dead. The ability of the US to run a trillion dollar military while maintaining domestic consumption and investment on other people’s dime is now history.

9. The fate of the global economy and of the G7 economies in particular, is almost
entirely dependent upon the ability of a select group of emerging countries to maintain their recent rapid economic growth. The tail now wags the dog.

10. As long warned by eco-crazies, numerous countries are seriously threatened not just with ecological havoc but with imminent famine due to explosive growth in food prices, driven by unsustainable population growth as well as the criminally irresponsible craze for Northern hemisphere biofuels.

11. Oil prices have broken through $100, wheat prices have more than doubled in one year, and gold is heading for $1000 (alas, we missed this last trade). Global inflation is being driven not primarily by excessive demand, nor by monetary madness, but by the uncontrollable increase in cost of commodity inputs – which are not amenable to control by monetary means. Supply is becoming the major issue. Competition for resources from emergent “Chindia” has fundamentally altered the relative positions of producers and consumers…to the benefit of the former.

12. Quite extraordinarily, amidst all the devastation – Russia is increasingly assuming the role of a safe haven! No subprime, virtually no structured finance, reasonably profitable banks, and a rouble seeing gradual appreciation. Add in the huge twin surpluses, political stability and sustained economic growth (8.1%), along with good domestic liquidity (with a little help from the Central Bank.) Only inflation
(largely commodities-driven) is a substantial issue. Doomsday scenarists and survivalists should take note of Russia’s self-sufficiency in energy, food and metals.

Russophobe developments include Tim Bell going to work for Lukashenko to polish his image. If his relationship with Berezovsky is anything to go by, the West will soon by lining up to lick dear old Batka’s boots. The West reveals its innate hypocrisy – Russia slams acquittal of Kosovo war crime rebel as biased. Slanderous serpent Aslund sells an asinine story, Putin’s last stand, venom practically poring out from its text. Loco Lucas scares us with a piece on Russia’s alleged SIGINT activities. Robert Service (We provoke Russian paranoia at our peril – By agreeing to place an American defence system in Eastern Europe, Nato has given the Kremlin the perfect excuse to further cement its autocratic rule) has the right idea, but for the wrong reasons.

Thankfully Russophiles balance out the picture somewhat. The excellent Russia scholar Nicolai Petro has a piece on the Russian elections, which makes the point that all the allegations levelled against Russia in electoral performance can equally be made against most European countries and the US, and that their cardinal sin was in making the “the wrong choice by voting in favor of a continuation of the present political course”, as in Palestine or Venezuela. His other article, Should Moscow Root for Obama?, comes to the conclusion that all the candidates are dinosaurs.

For now, the dinosaurs are firmly in control of US foreign policy toward Russia, on both the Republican and the Democratic side. Senior advisors from all three campaigns took part in the March 2006 Council on Foreign Relations report, “Russia’s Wrong Direction,” co-chaired by Jack Kemp and John Edwards. Criticized by Russian commentators as hopelessly out of touch with today’s Russia, it remains,
nevertheless, the touchstone of US thinking about Russia. So long as that is true, the only thing to expect from US policy toward Russia is a further slide into irrelevancy. The initiative for change, it seems, will have to come from Russia.

Note that both these pieces confirm the views expressed on this blog here, here (under The Myth of Sham Elections) and here (although I did say Clinton may be the least worst).

Russophile blogger colleen shows up Lucas, if indeed it isn’t obvious by now, for the incompetent lunatic he is.

Edward Lucas used to think and say that German Chancellor Angela Merkel hated
Russia, loathed it from birth, and will lead a strong European Union against Russia. I’m not sure exactly in which way, but Lucas could have easily contemplated economic embargoes and public slanders and stuff like that. He is a very fantastic and imaginative writer, no less. lol

But he does hate Russia a lot, no doubt, so maybe when it came to writing about ways a German-led E.U. would stick it to Russia, he would have thought of something clever.Anyway, something must have happened in the hot summer days of 2007, while I was probably at a beach in the still-affordable Hampton Bays, which led Lucas to change his mind. Did Angela Merkel telephone Lucas threatening a lawsuit for libel? Was The Economist scared that such a phone call was forthcoming and decided to pull the plug? Did the FSB pressure Lucas, or was it the KGB??? Was David Miliband in on it, perhaps trying to resuscitate British-Russian relations?Or, did Lucas himself decide to end the outlandish, misguided, and ill-conceived allegation himself?

Maybe, just maybe, Lucas realized that he’s just making things up after it became more and more apparent that the Russian-German strategic partnership forged between Putin and Schoeder is simply being reinforced during Merkel’s reign. This signifies that strong Russian-German relations are not reliant on any one political party in Germany and reflect more of a state-policy.

An Economist writer admits the obvious fact Russian is the world’s best language. A new feminine vodka brand was launched, thus joining the sovereign vodka Putinka and masculine Grazhdanskaja Oborona (Civil Defence), its supposed Nazi imagery criticized by the human rights folks and praised by the far right “White Pride” movement.

Topping off the ludicrous, Abramovich plans a bridge from Chukotka to Alaska. Then again, the source for this is “speculation within the Russian press”…so maybe not.

Following my introduction to Levada, I’m presenting a few more polls from their archives.

NATO poll – the number of Russians thinking that Ukraine joining NATO represents a threat to Russian national security increased from 60% in 2000 to 74% in 2008. For Georgia, it was 77% in 2008.

Can Western criticism of Russia on democracy and human rights be considered interference in Russia’s internal affairs? – 51% say yes, while only 27% say no. Take that, Russophobes of the world! You’re not needed, least of all by Russians!

Internet poll – the number of individuals saying they possess a mobile phone increased from 2% in 2001 to 19% in 2004 and 71% in 2007. The number of people whose families possess a computer increased from 4% in 2001 to 10% in 2004, 17% in 2006 and 28% in 2008, while the number of people saying they use one everyday increased from 9% in 2001 to a quarter in 2008. Weekly Internet use has expanded to 18% in 2008 from 3% in 2001. (Internet penetration in Russia as of 2007 is estimated from 20% to 25%.)

Electronics poll – From 2003 to 2007, the percentage of Russians saying they have access to a computer increased from 26% to 43%, Internet access increased from 15% to 29%.

How did things change in Russia in the past ten years? The percentage of people saying respect for the state has strengthened rose from 10% in 2000 to 44% in 2007, respect for marriage from 5% to 17%, respect for the law from 4% to 29%, personal responsibility from 11% to 33%, the work ethic from 12% to 26%, belief in God from 67% to 64%, concern for social outcasts from 16% to 31% and tolerance for others from 25% to 26%.

Two comments. Firstly, while more people said most of these situations got worse rather than better, it needs to be borne in mind that people generally mistake these questions for current perceptions rather than conduct a real analysis of trends. For instance, there are many cases when crime goes down but people say it increased. Secondly, goes to show that, if it isn’t already obvious to everyone who is not a religious nutjob, that belief in God does not necessarily correlate with more morality.

How would you rate Putin? – 70% are positive on living standards, 85% on foreign policy, 64% on security and 62% on democracy and human rights. As of 2008, his main achievements are judged to have been economic and social, while his greatest failures were in the war against corruption and crime.

Which country would you prefer to live in? – From 2000 to 2008, the percentage of Russians who’d like to live in a Great Power or in a small, cosy country increased from 63% to 75%; those who’d like to live in a country which actively defends its culture and traditions as opposed to a completely open country increased from 62% to 77%; the percentage of Russians who’d prefer to live in a country heavily influenced by religion as opposed to secular state decreased from 33% to 27%.

What do Russians believe in? – 45% believe in the Afterlife, 40% believe in the Devil, 45% in Heaven, 40% in Hell and 49% in religious miracles. Worryingly high figures.

According to this poll, Communists are by far the most pessimistic people in Russia, while those who are pro-Putin and pro-United Russia have the most confidence in tomorrow. The Liberal Democrats (ultra-nationalists) are in between.