Russia: The Old Tricks Still Work

[Valin]

Strategy Page:

July 14, 2016:

 

Government efforts to control what appears on the Internet (inside Russia) and in domestic mass media are not sufficient to keep out damaging evidence of corruption among the Russian leadership. This got a lot worse after the April 2016 release of 11 million documents stolen (via hacking) from a Panama based international law firm (Mossack Fonseca). Data from these documents showed many prominent Russian officials did business with Mossack Fonseca, a firm that assists wealthy people who want to set up overseas bank accounts and corporations whose owners are very difficult for most people (or even other governments) to identify. The Mossack Fonseca records provided details of enormous wealth owned by Russian officials who could not explain where it came from. In the state controlled media these revelations don’t exist (“more Western lies not worth repeating”) but these details get into Russia via the Internet and eventually reach just about everyone. The damage done is considerable because it makes Russians realize that since 2014 Russia has been making a lot of headlines but not much else. The economy is a mess, it has fewer allies and the future looks dim. Invading Ukraine and Syria has not helped solve any of the fundamental problems. What passes for “good news” is things like foreign economists recently agreeing that the Russian economy is shrinking less than expected this year (1.2 percent smaller GDP rather than 1.5 percent). “Victories” in Syria and Ukraine don’t pay the rent or put food on the table. More and more Russians are just getting by and the appeal of the new nationalism is fading.

 

What went wrong? Russia entered the 21st century with a new elected government dominated by former secret police (KGB) officers who promised to restore economic and civil order. They did so but in the process are turning Russia into a police state with less political and economic freedom. A growing number of Russians opposed this and the government responded by appealing to nationalism. Russia has returned to police state ways and the traditional threatening attitude towards neighbors. Rather than being run by corrupt communist bureaucrats, the country is now dominated by corrupt businessmen, gangsters and self-serving government officials. The semi-free economy is more productive than the centrally controlled communist one but that just provides more money to steal. A rebellion against the new dictatorship has been derailed by astute propaganda depicting Russia as under siege by the West. Yet opinion polls that show wide popular support for this paranoid fantasy has left enough Russians with democratic impulses to continue demanding better government and needed reforms. But for now most Russians want economic and personal security and are willing to tolerate a police state to get it. That atmosphere, plus the anxiety generated by the Ukraine aggression has scared away a lot of foreign investors and many Russian ones as well. Russia can downplay this in the state controlled media but without all that foreign and Russian capital the economy cannot grow. The only major economic power Russia can still do business with is China and the Chinese recognize the economic weakness of Russia and refuse to get too involved.

 

(Snip)