« Monday Numbers | Main | Cheap Digital Cameras = Big Brother is Watching? »

Russia: The Iran Effect

One of the nuances of the rising crisis of Iran's pursuit of nuclear ambitions is the parallel pressures being felt by Iran and it's key ally, Russia. While Iran has felt a more strong rebuke from the international community, Russia has had a very negative year diplomatically, stemming from it's perceived negative involvement in supporting corrupt elections in Belarus, extorting money from former Soviet republics for oil, and pursuing less-than-democratic reforms in the media.

The EU and America, both working together to end Iran's nuclear movement, have also seen a decline in their relations with Russia. From Pavel K. Baev:

Every recent election in Europe has severed a connection with Moscow, allowing Russia to drift further and further away from the rest of the continent. Italy is the latest point in this trajectory since Prime Minister Silvio Berlusconi's defeat this week signifies for Russian President Vladimir Putin the loss of a key European ally and the end of a carefully cultivated personal friendship (Vremya novostei, April 11; Gazeta.ru, April 13). The March 26 parliamentary elections in Ukraine, inconclusive as they are, have confirmed Kyiv's European vector and shown the steady retreat of the pro-Russian forces in the multi-colored political arena (Lenta.ru, April 11). Presidential elections in Belarus on March 19 and the swift suppression of public protests against the crudely manipulated voting left Putin, who rushed to congratulate Alexander Lukashenka on his victory, alone against the broad European condemnation of this authoritarian regime (Ekho Moskvy, April 11). Even the elections in the Palestinian Authority fit the pattern, since Moscow's readiness to embrace the Hamas leadership has generated mild disapproval in Europe and bitter acrimony in Israel (Kommersant, April 12).

Each setback with elections in the near and far neighborhood, however, increases Putin's distaste regarding the proposition that his tightly hand-managed system of power should be subjected to the test of competitive -- even if only formally -- decision-making by the general population. This entirely unnecessary procedure goes directly against his self-perception as the CEO and the chairman of the board of a corporation comprising all structures of the Russian state. This self-perception, which in fact is not that different from how Berlusconi had seen himself until last weekend, probably informed Putin's first words to the "captains" of business that were gathered in the Kremlin last month: "Dear colleagues" (Vedomosti, April 4). Russian state/corporate culture could be quite relaxed and the discipline in the hierarchy should not necessarily be draconian, but the idea that the top management must be exposed to electoral choices of the "lower ranks" is simply alien. Berlusconi's scandalous resistance to his removal from a position of power only reinforces the conviction among Putin's entourage that undesirable surprises must be prevented at any cost.

Elections, however, remain a source of grave risks and the possibility of a sudden shift in the electorate's mood cannot be eliminated. Amassing "administrative resources" and employing every available "political technology," the Kremlin still cannot overcome the pervasive fear of elections. While perhaps not entirely rational, this feeling is driven by growing mistrust among Putin's courtiers and rooted in their common knowledge that the Russians indeed have very good reasons not to trust any of them. The only way to exorcise this fear is to spread it not only through the business elite, which constitutes less than 1% of the population, but also across the middle entrepreneurial class that has grown to about 20% (Kommersant, April 12). Uncertainty about the immediate future, which can bring any kind of semi-official offer that cannot be refused, including the sell-off of prime assets, is an irreducible feature of Russian business climate. Fear is the main instrument of establishing dominance of the 1.462 million strong army of bureaucrats, which increased by 10.9% in 2005, over the oppressed, abused, and potentially hostile class of middle and small business (Lenta.ru, April 12; Ezhednevny zhurnal, April 11).

This instrumentalization of the fear factor creates various distortions in Russian economic activities, from the increase of "informal taxation" to the speculative growth of the Moscow property market. Such respected experts as Yevgeny Gavrilenkov and Yevgeny Yasin have argued this week that the abnormally low level of investment affects the dynamics and the quality of economic growth and generates huge inflationary pressure (Nezavisimaya gazeta, April 11). Entrepreneurs have no confidence in their own businesses and are reluctant to invest, so money flows into the stock market, which expanded by some 20% since the start of the year, or into the accelerated growth of consumer imports. Corporatist politics invariably translate into deformed and stagnant economics. Putin's team of managers may try to hide their fiasco by doctoring accounts and spinning new slogans, but Berlusconi was a grand master of these tricks -- and they helped him only so far.

While the nuclear winter has stemmied efforts to draw Iran into the international table, Russia's geopolitical interference has created a freeze over relations with the Western world.

Like this post? Get updates via RSS or email.

|

TrackBack

TrackBack URL for this entry:
http://www.ablogistan.com/mt/mt-tb.cgi/183.

Comments (1)

The only way to exorcise this fear is to spread it not only through the business elite, which constitutes less than 1% of the population, but also across the middle entrepreneurial class that has grown to about 20% (Kommersant, April 12).

Posted by אתר ששבש | July 19, 2006 7:14 AM

Post a comment