Russia disappoints the world

**Ray** · 11 Feb 08, 04:54

Thursday, Feb. 7, 2008

Russia disappoints the world

By DAVID HOWELL

LONDON — What are we to do about Russia?

The question is a truly transcontinental one, since Russia is the next door neighbor of both Europe in the West and Japan in the East, and right now it is proving a very awkward one to handle.

For Europeans in general, and for Britain in particular, President Vladimir Putin's Russia is proving very different from the benign, open and friendly democracy that many hoped it would become when the Soviet Union collapsed.

Of course it was always recognized that the transition would be a difficult one, after years of communist misrule, hopeless economic distortion and suppression of enterprise in a swamp of overly centralized bureaucracy.

But in the event the move to free enterprise and market forces went if anything too swiftly. Clever monopolists quickly cornered the energy sector and amassed vast fortunes, the stock market soared, foreign investors crowded in (many of them burning their fingers) and alongside business growth crime and corruption flourished on a colossal scale.

But at least the place seemed friendly, attracting many tourists and seemingly ready to join the new democratic globalized order as a helpful member state.

Then came ex-KGB officer Putin, and things began to change. At first the West applauded the new strong man who would regain Russia's assets from the mega-rich oligarchs for the Russian people. It soon turned out that the Russian leadership was determined to play on extreme nationalist feelings, reject the view that it had somehow "lost" the Cold War and re-assert Russian power and influence.

Buoyed up by soaring oil and gas prices, Russia has now plainly joined the "awkward squad" of nations who always seem to be looking for trouble, rather than peaceful cohabitation with the rest of the international order.

The catalog of difficulties and tensions gets longer every day. The latest manifestation is Russia's very unhelpful attitude to the delicate issue of Kosovo, the former Serbian region whose Albanian majority is determined to break away and become independent. After years of negotiations the United Nations came out with a solution supervised independence under which the Serbian minority would be scrupulously guarded against Albanian violence.

It seemed the only way sensible forward, but the Russians are blocking it at every turn. Instead they are bolstering Serbia's natural reluctance to see an ancient piece of their territory break away. But this is only the latest in a long line of unhelpful Russian postures. Over Iran and its nuclear ambitions the Russian stance is ambiguous.

They say they do not want a nuclear Iran, but nor will they help over sanctions and other pressures to bring the Iranians to their senses.

Will they cooperate over international crime? Not much, to judge by Russian determination to prevent the chief suspect in the London murder of Alexander Litvinenko (by a particularly sinister form of radioactive poisoning) from being extradited to Britain and questioned.

The issue, instead of being handled quietly between friends, has turned into a major deterioration in British-Russian relations, with diplomats being expelled on both sides and now the Russian authorities closing down offices of the harmless, and completely non-political, British Council as some kind of almost childish retaliation.

Meanwhile, the whole of Western Europe looks at this prickly and unpredictable giant to its east with especial anxiety. This is because continental Europe is now heavily dependent on Russia for its daily supply of natural gas to its homes and factories — overall about 40 percent but in some countries, such as Austria and Hungary, almost entirely. This has produced brave talk from the EU institutions about a common energy front against the monopoly Russian supplier Gazprom — in effect part of the Russian government — while in practice each individual country, led by Germany, has quietly and fearfully made individual bargains with the Russians.

Countries closer to Russia, such as Ukraine and Belarus, who have dared query the terms of their gas supplies, have been met with the full force of Russian "energy diplomacy" and threatened with huge price hikes and cutoffs.

But all this behavior pales beside the rough treatment of foreign businesses that have invested heavily in Russia can now expect. Both the two British oil giants, BP and Shell, once warmly welcomed in Russia, have felt the hostile embrace of the Russian tax authorities and other agencies making their lives difficult at every turn.

Instances occur of arbitrary police raids on company offices, company identities being hijacked and then the companies faced with huge fines after bogus legal proceedings.

This is turning a nation that should be a responsible and key ally in the new international order into an ugly playground for crime, corrupt officialdom and xenophobia.

The only result can be to drive away the foreign investors who once crowded in and leave Russia isolated and disliked, temporarily enriched by high oil prices but in the end impoverished.

For the British it is particularly tragic because there exists in British minds a real sympathy and admiration for Russia and its people, for its culture, its literature, its sparkling genius and its past suffering. The temptation is to walk away and leave the Russians to their own self-imposed traumas — a riddle, wrapped in an enigma, inside a mystery, as Winston Churchill once described this mighty country.

But the right course is to be patient, not to retaliate except where the provocation is extreme, to see Russia as the disturbed nation it still is after the appalling communist experience and to keep reaching out in the hope that friendship and communication will bring Russia back into the respected place in the world it ought to enjoy.

It is not going to be easy, and the aggressive and surly Putin leadership — now being continued for some years to come with a slight reshuffling of Kremlin positions — makes it harder still. But we, the would-be good neighbors at both ends of great Russia — must all keep trying.

David Howell is a former British Cabinet minister and former chairman of the Commons Foreign Affairs Committee. He is now a member of the House of Lords.

Russia disappoints the world | The Japan Times Online

What are we to do about Russia?

Well, obviously the world can't put Russia in the buggy and we all go riding as we would have done for the Lonesome Lover!

It is very apparent that Putin is not going to toe Yeltsin's subservient line. Russia has been humbled by the breakup of the USSR and a "defeated" nation always lick the wounds and gets ready to bite back. Therefore, Putin's fight is not unnatural. However, that does not mean that Russia can claw back to the 'glorious' days of the Soviet power! It maybe flush with oil money, but then it has lost its strategic space and the access to strategic minerals and industries that the USSR used to bank on as axiomatic.

Further, with the demise of the USSR and the rise of Islamic fundamentalism, the strategic balance the world over has changed. All bow to the Rising Sun and the Rising Sun or already Risen Sun is the US. Russia can only hope that the US plays its cards wrongly so that there can be a power shift. But that does not seem to be in the offing!

Yet, Russia's nuisance value, if it can be called so, continues.

International industries will not turn back from Russia no matter what the media may state. The reason is simple. There is great business prospects and cash flow irrespective of the problems. And businesses are for money and not for politics! And while there will be concerns, it will take a lot more for the businesses to turn their back onto the riches they see in Russia's Ali Baba's caves!

In fact, the political philosophy that Russia follows is but the result of the actions of the West, if seen pragmatically. A nation that could not breathe without govt control is today technically free to breathe and be natural. Obviously, the Russians are confused and hence cannot control or savour their new found individual freedom. Thus, bizarre actions are not out of place!

Russia shall be looking for cracks in the western resolve and they will exploit it to the hilt as in Iran and Kosovo. It has much to gain by acting as the champion of the 'underdog', as the nations targeted feel that they are!

If one observes the world events, Russia is indeed putting a finger on all the pies where there is some international discord and at the same time, extracting its pound of flesh with its surging economy!

A witch's brew!

**T_igger_cs_30** · 11 Feb 08, 05:19

A former half Colonel in the KGB a leoprd does not change his spots

Putin's rollback of democracy started with independent media outlets. When he came to power, three television networks had the national reach to really count in Russian politics -- RTR, ORT, and NTV. Putin tamed all three. RTR was already fully state-owned, so reining it in was easy. He acquired control of ORT, which had the biggest national audience, by running its owner, the billionaire Boris Berezovsky, out of the country. Vladimir Gusinsky, the owner of NTV, tried to fight Putin's effective takeover of his channel, but he ended up losing not only NTV but also the newspaper Segodnya and the magazine Itogi when prosecutors pressed spurious charges against him. In 2005, Anatoly Chubais, the CEO of RAO UES (Unified Energy Systems of Russia) and a leader in the liberal party SPS (Union of Right Forces), was compelled to hand over another, smaller private television company, REN-TV, to Kremlin-friendly oligarchs. Today, the Kremlin controls all the major national television networks.
"The Myth of the Authoritarian Model"
Micheal McFaul & Kathryn Stoner-Weiss

He (Putin) has also reduced the autonomy of regional governments by establishing 7 supraregional districts headed by former Generals and KGB officers.
Add to that he has reinstated long range bomber flights/patrols and much more, he has tried to hide it behind western suits and a modern appearence, but Putin is definatley old school.

**~~Adux~~** · 11 Feb 08, 05:37

This Putin propaganda is getting a bit of hand, ofcourse when you have Boris Berezvosky 'the kingmaker' sitting in UK trying to make revolutions in Ukraine, Latvia and Russia. He is being hailed by Neil Bush and the rest of fatarnity as the champion of human rights and democracy, Somehow everyone failed to look into his past.

There are many a cases where Russia is being pushed to the corner. That is not the way to deal with the Russians. They are way to powerful to be dealt with likes of third world.

**lwarmonger** · 11 Feb 08, 06:49

Originally Posted by Adux

There are many a cases where Russia is being pushed to the corner. That is not the way to deal with the Russians. They are way to powerful to be dealt with likes of third world.

Part of the problem is that they became third world. Now they are trying to claw their way back into the first.

The problem is that first world strength is ultimately determined by economic power, which underpins military and political power. Putin is not taking actions that strengthen his nation's economy... over the long term the Russian economy (independent of energy prices) will continue to decline relative to the rest of the world unless foreign investors are willing to come.

**~~Adux~~** · 11 Feb 08, 07:45

Sir,

Russians have a huge technological and educational base, they are not the same as oil producing arab states. So they are not exactly third world in my opinion. They have matured industries, what they lack is managment of economy and a proper stock market.I am of the firm belief and I am sure rickusn would back me upon this, Russia is building itself up, and their chances of success looks more likely than ever before. It will be diplomatic stupidity to keep on provoking Russia, when in reality Russia and the west has the enemy now : Islamic Terrorism.

There is a concerted effort especially on the part of UK to undermine Russia, Whatever Putin maybe, the Oligarch's were worse. Oligarchs were pumping money into the UK coffers, when it stopped, Putin became bad. Lets not always be goodie goodie two shoes here. The west has also played enough dirty politics as much as the ruskies. I am sure Litvenko was killed by the FSB, but then again along with Boris Brezvosky, a former oligarch who didnt even pay his own shareholders was planning coup attempts in Moscow from London. What will be the US reponse if somebody was attempting to overthrow a elected US President?

Foriegn Investors will flock to Russia no matter what, The Oligarch's werent doing business, they were infact raping Russia. I will be amazed if the current Russian economy declined, i expect it to flourish even more under Mendenvev(spelling?), as I expect him to loosen some of the screws tightened by Putin. Which were needed when the Oligarchs were around.

PS: The greatest success of the West in my opinion, if it would be able to get Russia join the EU. Crack open on the SCO, China is no friend of Russia anyways. Time to look for new enemies.

**T_igger_cs_30** · 11 Feb 08, 08:04

Originally Posted by Adux

PS: The greatest success of the West in my opinion, if it would be able to get Russia join the EU. Crack open on the SCO, China is no friend of Russia anyways. Time to look for new enemies.

I have pretty well learned never to say "never happen" but if it does will be an awfull long time in coming

**~~Adux~~** · 11 Feb 08, 08:11

Originally Posted by T_igger_cs_30

I have pretty well learned never to say "never happen" but if it does will be an awfull long time in coming

Well the Brits and their Psuedo-Political Correct Brigade isnt making it any easier nor is poking the Russians where it hurts by the west. They may have short term benefits, but in the long term Russians going against the West is not in their interest even by a long shot.

**lwarmonger** · 11 Feb 08, 08:26

Originally Posted by Adux

Sir,

Russians have a huge technological and educational base, they are not the same as oil producing arab states. So they are not exactly third world in my opinion. They have matured industries, what they lack is managment of economy and a proper stock market.I am of the firm belief and I am sure rickusn would back me upon this, Russia is building itself up, and their chances of success looks more likely than ever before. It will be diplomatic stupidity to keep on provoking Russia, when in reality Russia and the west has the enemy now : Islamic Terrorism.

Well, the Russian economic difficulties are threefold. First, much of their current boom is due to higher energy prices, of which they are a major beneficiary. While energy prices remain high. However, this artificially inflates the Russian economy, and in essence turns the ruble into a petro-currency (making manufacturing and other exports less competitive in the long term because the ruble is artificially high). While the Russians possess a much larger industrial base than any of the other oil nations, they are no longer (and haven't been for a while) in the first tier of nations economically.

Problem number two, is that so much of their industrial plant is focused on heavy industry. Steel and cement are good industries, but not for a first world nation. They have relatively low output (in value) per head when compared to higher end manufacturing, in little prospect for improvement (steel isn't going to advance by leaps and bounds anymore, certainly not as fast as cars, aircraft, services, computer technology, ect... all industries where Russia lags behind). While Russia does possess some information technology and other advanced industries (most are still in the growing stage), these will be hamstrung by problem number three unless things change.

Problem number three... capricious behavior on the part of a large government against business will inevitably scare business away. Foreign investment and the free exchange of goods are important to any nation, but especially important to Russia. If they are going to grow their important "modern" industries they can't continue to make doing business in Russia difficult for foreigners, because it is that foreign capital that is going to finance those industries and keep them competitive.

And finally, I don't really see how the West is provoking Russia. We have expanded NATO and the Europeans expanded the EU, yes, but former Warsaw Pact countries started lining up to join almost as soon as the Soviet Union collapsed. Russia kept her alliance together through force, and when it fell apart it wasn't our fault that their former "allies" couldn't wait to join us.

There is a concerted effort especially on the part of UK to undermine Russia, Whatever Putin maybe, the Oligarch's were worse. Oligarchs were pumping money into the UK coffers, when it stopped, Putin became bad. Lets not always be goodie goodie two shoes here. The west has also played enough dirty politics as much as the ruskies. I am sure Litvenko was killed by the FSB, but then again along with Boris Brezvosky, a former oligarch who didnt even pay his own shareholders was planning coup attempts in Moscow. What will be the US reponse if somebody was attempting to overthrow a elected US President?

I'm not saying the oligarchs were good for Russia, they most certainly weren't. However Russia is becoming increasingly random in how it treats all business. If a nation randomly demand taxes from certain industries that are reliant upon foreign investment, those foreign companies will take their money elsewhere, and those industries (especially the new ones that aren't very established) will stagnate and die. And I'm gonna be honest with you... I don't see how the British have made an attempt to undermine Russia. So I've got to ask you how have the British been undermining Russia?

Foriegn Investors will flock to Russia no matter what, The Oligarch's werent doing business, they were infact raping Russia.

Ok, the two parts of this sentence aren't really connected, so I'll address the first part, because the second part I already addressed and agreed with. If you randomly steal from foreign businesses they aren't going to come to your country. That is true for any nation, and is most true for nations where operations are already iffy (due to crime, corruption, red tape ect).

I'm gonna be frank. Economically, there are greener pastures than Russia that are being more friendly to business. Foreign investors don't flock to any country "no matter what..." they have to be confident that they are going to make money. The more random seizures and taxes and bribes that occur the lower the margins and the riskier the investment. The lower returns on riskier investments mean that fewer companies will consider it worthwhile to invest in Russia, and will ultimately make restoring trust more expensive.

PS: The greatest success of the West in my opinion, if it would be able to get Russia join the EU. Crack open on the SCO, China is no friend of Russia anyways. Time to look for new enemies.

Not even an option... from a Russian or European perspective.

**~~Adux~~** · 11 Feb 08, 09:19

Originally Posted by lwarmonger

Well, the Russian economic difficulties are threefold. First, much of their current boom is due to higher energy prices, of which they are a major beneficiary. While energy prices remain high. However, this artificially inflates the Russian economy, and in essence turns the ruble into a petro-currency (making manufacturing and other exports less competitive in the long term because the ruble is artificially high). While the Russians possess a much larger industrial base than any of the other oil nations, they are no longer (and haven't been for a while) in the first tier of nations economically.

Sir,

I expect the price of oil to fall to 60 dollars by the second of this year. Current price is artifical and not sustainable for long periods of time. Russians are aware of this and I agree with you they dont have a first tier economy but they are not third world either, and their base is excellent. Population is Russia's biggest problem, I have heard % has picked up this year. If yes, good for them.

Problem number two, is that so much of their industrial plant is focused on heavy industry. Steel and cement are good industries, but not for a first world nation.

Maybe. But the cement makes sense to Russians, Since China and especially India, we are experiencing boom. The last two years, a bag of cement has gone up by 50% in value. The Government is planning to import cement. Russia has an advantage over the west here, they have good R&D capability as well as cheap basic items. Something that is being serviced by China for the West. And India wants Steel like no other nation. So why not?

They have relatively low output (in value) per head when compared to higher end manufacturing, in little prospect for improvement (steel isn't going to advance by leaps and bounds anymore, certainly not as fast as cars, aircraft, services, computer technology, ect... all industries where Russia lags behind). While Russia does possess some information technology and other advanced industries (most are still in the growing stage), these will be hamstrung by problem number three unless things change.

You are precise in your assesment, except they have started chugging now. I expect the Russian economy to pick up in growth, even after the Oil goes down.

Problem number three... capricious behavior on the part of a large government against business will inevitably scare business away. Foreign investment and the free exchange of goods are important to any nation, but especially important to Russia. If they are going to grow their important "modern" industries they can't continue to make doing business in Russia difficult for foreigners, because it is that foreign capital that is going to finance those industries and keep them competitive.

Lots of it has to do with propaganda, Russian government has only acted against Oligarchs. Neil Bush going with Boris Bersverzky to Lativa to 'educatonal software'. Whatever that was?

Lobby to harrass Russia is in works and Russia cant do much now, Other than what it is doing now. Completely unecessary.

Anyways, I have a feeling Menendev would do more to integrate with European community.

And finally, I don't really see how the West is provoking Russia. We have expanded NATO and the Europeans expanded the EU, yes, but former Warsaw Pact countries started lining up to join almost as soon as the Soviet Union collapsed. Russia kept her alliance together through force, and when it fell apart it wasn't our fault that their former "allies" couldn't wait to join us.

Ofcourse it is right, But I hope the West also does should factor in reactions of Russia, and it will not be like in 1990's.I am sure you are aware they were a superpower and is more than capable of building themselves back into one, as their current trend seems to suggest. Expansion of NATO currently is harrassing Russia, and there is no two ways about it.

I am sure there is a better way of handling Russia.

I'm not saying the oligarchs were good for Russia, they most certainly weren't. However Russia is becoming increasingly random in how it treats all business. If a nation randomly demand taxes from certain industries that are reliant upon foreign investment, those foreign companies will take their money elsewhere, and those industries (especially the new ones that aren't very established) will stagnate and die. And I'm gonna be honest with you... I don't see how the British have made an attempt to undermine Russia. So I've got to ask you how have the British been undermining Russia?

Like I said before, Unless Oligarchs are involved Russian government doesnt interfere. I have people running business in Russia, and they are doing extremely well. As far as I am aware Russian government hasnt stopped any company from making profits, unless they intend to steal resources of russia or not pay a fair price for it. something that led to creation of the oligarchs.

I am sure aware, Britain openly supports very anti-russian government faction. Boris Bersvozky lives in london and used it as the base to start the Orange revolution in Ukraine and start his Kommersant newspaper in Ukranie as well as in Russia. Which I might add is still running in Russia. Most of the money coming out of Oligarchs ended up in Britain and their Football clubs. Oligarchs out of power was a loss of income to Britain. 10-15 billionaire's out of the Financial Collapse of 1990's. I am sure you know that money is dirty. Russian government acted to protect its country and its people.

Brits had to open a British council office without clearance from the Russian govenrment, they dont let that happen in Britain nor do they let that happen in my country. As much as I hate to say this, In this case Brits were a arrogant bunch.

I'm gonna be frank. Economically, there are greener pastures than Russia that are being more friendly to business. Foreign investors don't flock to any country "no matter what..." they have to be confident that they are going to make money. The more random seizures and taxes and bribes that occur the lower the margins and the riskier the investment. The lower returns on riskier investments mean that fewer companies will consider it worthwhile to invest in Russia, and will ultimately make restoring trust more expensive.

Ofcourse there are greener pastures than Russia, like say India. But there are some areas which Russia is doing very well, and is the best place to make money.

Not even an option... from a Russian or European perspective

Sir,

Why is that? I am more interested in this.

**physicsmonk** · 11 Feb 08, 09:35

Originally Posted by lwarmonger

Not even an option... from a Russian or European perspective.

well if i believe Parag Khanna's article in NYT its an option from European perspective atleast.
The New York Times > Log In
it has Quotes like this

Russia lost its western satellites almost two decades ago, and Europe, while appearing to be bullied by Russia’s oil-dependent diplomacy, is staging a long-term buyout of Russia, whose economy remains roughly the size of France’s.

Privately, some E.U. officials say that annexing Russia is perfectly doable; it’s just a matter of time. In the coming decades, far from restoring its Soviet-era might, Russia will have to decide whether it wishes to exist peacefully as an asset to Europe or the alternative — becoming a petro-vassal of China.

its a long article and i dont agree with all his premises except the one on India.

**~~Adux~~** · 11 Feb 08, 10:14

P.Monk,

That article is utter tripe IMHO, his assumptions on the first paragraph's itself lost its creditability. Playing up the Chinese threats and advantages not their disadvantages.

Lwarmonger,

while London and Berlin welcome Russia’s billionaires, allowing the likes of Boris Berezovsky to openly campaign against Putin.

The New York Times > Log In

**physicsmonk** · 11 Feb 08, 10:53

Originally Posted by Adux

P.Monk,

That article is utter tripe IMHO, his assumptions on the first paragraph's itself lost its creditability. Playing up the Chinese threats and advantages not their disadvantages.

Lwarmonger,

The New York Times > Log In

Iagree.even I said I dont agree with his premises except when he says India lacks strategic apetite.

**lwarmonger** · 11 Feb 08, 11:31

Originally Posted by Adux

Sir,

I expect the price of oil to fall to 60 dollars by the second of this year. Current price is artifical and not sustainable for long periods of time. Russians are aware of this and I agree with you they dont have a first tier economy but they are not third world either, and their base is excellent. Population is Russia's biggest problem, I have heard % has picked up this year. If yes, good for them.

Russia's industrial base is being hampered because their exports are artificially priced high. I'm not so sure that the price of oil is going to drop as drastically as you suggest, but ironically the longer it remains high the more difficult things will be for Russia over the long term. If Russia is ever to develop a modern information age economy, it's dependence on oil and gas exports is going to have to decrease.

Maybe. But the cement makes sense to Russians, Since China and especially India, we are experiencing boom. The last two years, a bag of cement has gone up by 50% in value. The Government is planning to import cement. Russia has an advantage over the west here, they have good R&D capability as well as cheap basic items. Something that is being serviced by China for the West. And India wants Steel like no other nation. So why not?

Because you have an educated population! There is demand for cement and steel, sure, but the value of production is so much lower than an information economy has, which is why most Western nations outsourced most of their heavy industries (the ones they retain are the high end manufacturing with large value output, or those with national security implications). The resources you have in the "heavy" portion of your economy would see much better returns in more modern areas, and be competitive for far longer.

You are precise in your assesment, except they have started chugging now. I expect the Russian economy to pick up in growth, even after the Oil goes down.

These industries are starting from so close to zero as to render percentage growth terms meaningless. Making it out of the infancy stage requires a lot of foreign investment and expertise, and in order to compete internationally those industries still have a lot of growing to do.

Lots of it has to do with propaganda, Russian government has only acted against Oligarchs. Neil Bush going with Boris Bersverzky to Lativa to 'educatonal software'. Whatever that was?

The Russian government has been gathering areas of the economy that it specifically views as important to itself. The oil and gas industry was targeted, and most of it is now controlled by the Russian government. That kind of attitude towards private enterprise in any portion of your economy has ripple effects. And sets a bad precedent. Rule of law and consistency is very important to attracting foreign investment, and Russia hasn't been doing a good job at either. You are correct in that thus far it has been very focused, so there hasn't been much of a backlash (in fact foreign investment has greatly increased over the past couple of years). However the more intervention occurs, the harder it will be to keep the dollars and euros flowing.

Lobby to harrass Russia is in works and Russia cant do much now, Other than what it is doing now. Completely unecessary.

How so?

Anyways, I have a feeling Menendev would do more to integrate with European community.

Do you really think Menendev would be calling the shots?

Ofcourse it is right, But I hope the West also does should factor in reactions of Russia, and it will not be like in 1990's.I am sure you are aware they were a superpower and is more than capable of building themselves back into one, as their current trend seems to suggest. Expansion of NATO currently is harrassing Russia, and there is no two ways about it.

The Soviet Union was a superpower, but they aren't going to be one again. While Russia has the ability to become a great power, Europe is continuing to integrate economically and is very far ahead of Russia, as is China.... and the US retains its commanding lead with an economy over ten times the size of Russia and military spending larger than everyone else in the world combined.

If Russia tries to become a military and political superpower it will only fail, and weaken itself economically in the process.

Like I said before, Unless Oligarchs are involved Russian government doesnt interfere. I have people running business in Russia, and they are doing extremely well. As far as I am aware Russian government hasnt stopped any company from making profits, unless they intend to steal resources of russia or not pay a fair price for it. something that led to creation of the oligarchs.

The Russian government exercises control over sections of the economy and businesses that it feels are important (oil and news thus far), and punishes people who oppose it. That creates a problem for investors, because who knows what section of the economy the government will decide to intervene in next, although until now the effects have been limited.

I am sure aware, Britain openly supports very anti-russian government faction. Boris Bersvozky lives in london and used it as the base to start the Orange revolution in Ukraine and start his Kommersant newspaper in Ukranie as well as in Russia. Which I might add is still running in Russia. Most of the money coming out of Oligarchs ended up in Britain and their Football clubs. Oligarchs out of power was a loss of income to Britain. 10-15 billionaire's out of the Financial Collapse of 1990's. I am sure you know that money is dirty. Russian government acted to protect its country and its people.

The British government's support for these oligarchs springs from the fact that they are being prosecuted for political purposes. The business interests that they have are not particularly significant to Britain (in monetary terms they are a drop in the bucket), however the fact that the Russian government is going after companies owned by them for political reasons is disturbing.

I also find it interesting that most of those being prosecuted for fraud and tax evasion are those who oppose President Putin.

Brits had to open a British council office without clearance from the Russian govenrment, they dont let that happen in Britain nor do they let that happen in my country. As much as I hate to say this, In this case Brits were a arrogant bunch.

The Russian foreign minister specifically said that the expulsion was in retaliation for the British expulsion of Russian diplomats in their on-going dispute. The offices were opened as part of the Russian-British cultural treaty of 1994... I believe the excuse the Russians are using to close them is tax violations. A very common theme these days, and one I have a hard time believing.

Ofcourse there are greener pastures than Russia, like say India. But there are some areas which Russia is doing very well, and is the best place to make money.

Russia can be a lucrative market, and has a lot of potential. However my impression of President Putin is that he is going to continue to intervene in the economy against those whom he wishes to harm politically. Right now that is the oligarchs who oppose him, and certain companies in targeted areas of the economy (the energy sector and telecommunications). If/when it starts becoming nation states (or their companies), that is when the flight of capital will begin.

Sir,

Why is that? I am more interested in this.

Russia's interests are not Europe's. Russia doesn't want to be part of the EU, in fact it sees itself as opposed to the EU in many areas (Ukraine, Baltic States, energy... not opposed here, but reaping every advantage it can and attempting to play European nations off against one another, ect). Russia right now is a nation that is trying to recapture what it lost when the Soviet Union fell. It doesn't want communism back (well, most Russian's don't), but it does want strong government (in the Russian sense of the word that means semi-authoritarian) and to be a force to be reckoned with independent of other powers. That is incompatible with a future in the EU.

On the other hand, Europe doesn't particularly want Russia either. There is already considerable backlash over the Poles and other Eastern Europeans who are entering Western Europe looking for employment. Part of that saturation of the job market is also what is driving the hypocritical opposition to Turkey's becoming a member ("you're too muslim," "your military intervened to make you secular," ect). They don't want more relatively poor people who will undercut their wages and whom they have no way of keeping out.

And the EU will not accept Putin's government. There have been a lot of claims about fixed elections (it is my opinion that any election fixing that has occurred has been quite gratuitous as there is no doubt in my mind that Putin is quite popular... excluding his opponents from public information mediums has completed the process), and the opposition is being increasingly frozen out of the political process. Putin is looking increasingly like an elected king to the bulk of Western Europe, and they aren't going to allow someone they view like that into the EU.

And finally there are the Eastern Europeans. They view Russia with suspicion (especially Poland), and any move to include Russia in an expanded EU would encounter substantial opposition from those nations that can still remember being dominated by Russia.

One final thought. In a lot of your posts I have gotten the impression that you consider opposition to Putin to be opposition to the Russian government, and by extension to Russia. I'm not sure whether that is consciously or subconsciously, but I think it to be part of the problem that Russia has with a truly western style democracy. As an American I can oppose the election of a candidate. I can vote against them, and I can oppose their views publicly. If their party controls the legislature and the presidency I can oppose them as well. However that does not make me against the US government. It means I disagree with the people who occupy those positions within the government. I still have my obligations as a citizen and a soldier, and fulfill both to the best of my ability regardless of which party controls what branch of the government.

Now, if the government starts selectively enforcing laws against people who disagreed with the party in power, that is time to start worrying. If people begin to associate the party in power as being the government, that is even scarier. From my perspective as an American, that is what is happening now in Russia. And the Russian people seem to be fine with that, because those who are being prosecuted and barred from participation are unpopular, and the economy is doing quite well.

**T_igger_cs_30** · 11 Feb 08, 12:28

Originally Posted by Adux

This Putin propaganda is getting a bit (out) of hand

I find this an interesting quote ,are you denying what is going on inside Russia right now?

ps... I inserted out as I am sure thats what you meant, forgive me if I am wrong.

**~~Adux~~** · 11 Feb 08, 12:39

Sir,

Let me first take this post for giving me such a informative reply as well as taking your time out for me. Though I dont agree some of your points, I will reply in my next posts.

Thank you

Adu

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