RUSSIAN FEDERATION SITREP 20130307

ELECTORAL SYSTEM. In the beginning, the Duma’s 450 seats were chosen half by party list and half by single mandate with a 5% threshold. Then Putin I changed it to all party list and 7% threshold. Putin II has just sent a bill to the Duma to change it back to the original. So what was the point of all that? The new law forbids electoral alliances – obviously another attempt to force like-minded people to unite. But we have 20 years of observational experience that Russian liberals refuse to sink their (small policy but large personality) differences. On a personal note, I was an observer in the 1995 election when 40-some parties ran. The party vote ballot was the size of a newspaper sheet and few voters had a clue. Are we going back to that?

CORRUPTION. Investigations all over the place. Phoney academic degrees; embezzlement at RusHydro; two frauds in the Penitentiary Service; tax evasion at RUSAL; a former Duma Deputy. And not to forget OboronServis: Prosecutor General Chayka says 25 separate cases have been combined, the total cost of which is now said to be over US$400 million. The MoD is target-rich: a general is suspended, a formerfinancial administrator jailed, a possible rotten rations scandal, and a supplier case. And the Olympics appear on the horizon: cost inflations. Sergey Ivanov has said that no one is immune. The Central Bank has weighed in with a statement that illegal money transfers amounted to US$49 billion in 2012 and thatevery tenth company making settlements through its payment system dodged tax payments in 2012. Obviously these cases have been in preparation for some time and investigators are digging. Definitely a serious campaign.

DEMONSTRATIONS. The Constitutional Court ruled that the minimum level of fines for violations of laws governing protests should be lowered and the Duma promised to do so soon. A couple of demos on Saturday: a Udaltsov-sponsored one pulled a couple of thousand and a pro-government one two to three times as many although there was a strong smell of fakery about it.  

DEMOGRAPHICS. The Health Ministry tells us that infant mortality was 8.7/1000 in 2012 which is a very considerable increase from the 7.1/1000 claimed for 2011. The true reason for the increase is that Russia has now adopted the WHO standard of definition. See Adomanis.

SECURITY CONCEPT. A new one is out but I haven’t read it – I’ve read so many of these impenetrable, repetitive, long-winded and curiously pointless documents in my career that I really have to nerve myself up to tackle another one. Judging from what Vlad Sobell tells me (he has read it) the major changes are a more pessimistic world view (and who would contradict that?) and much smaller expectations of cooperation with the USA (ditto). The main themes of multi-polar, UN, international norms, that have been repeated over and over, remain. I have never understood why Moscow produces these things – Western commentators typically go through them to find a sentence to spin to keep the anti-Russia fire burning. I suppose they are thought to serve some bureaucratic function, but, having laboured in a bureaucracy, my guess is that they are filed, unread.

ASSETS, REAL AND OTHERWISE. Moscow and Havana are a bit closer to dealing with the US $30 billion or so that Havana owes. They say part will be written off and part restructured. I expect Moscow will be lucky to get a kopek on the ruble. This should remind us of a post-Soviet reality. When the Russian Federation took over the USSR’s debits and credits, it took responsibility for debts to groups like the Paris Club that expected to be paid in full and acquired "assets” like Cuba’s debt. Indeed, when we add to these real obligations and worthless credits the capital flight from Russia and the supply of underpriced energy to its neighbours, it’s clear that Russia was actually subsidising people to its west in the 1990s.

MORES. It is often forgotten in the West that Russians are somewhat old-fashioned in their attitudes. We are reminded of this truth whenprosecutors issue a warning to a department store decorating its windows with mannequins having sex. What would have happened in London, New York or Toronto in the early 1960s?

GEORGIA-RUSSIA. More progress. Russian inspectors have cleared the way for the resumption of wine and mineral water exports. The two are holding regular meetings about improving relations where they can. Saakashvili, as usual, is spreading disinformation: his latest fable is that his defeat was a made-in-Russia operation. (Will his American flacks pick this up?) But, fortunately, he doesn’t seem to be getting any traction: the Georgian parliament today issued a unanimous statement on the course of Georgia’s foreign policy which greatly toned down the anti-Russia stuff.