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Putin’s Team is United: Talk of a Purge is Wrong

As the Russian government weathers a period of unpopularity caused by the recession, there is talk that Putin is about to purge his cabinet, but this is almost certainly wrong.

Alexander Mercouris

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An article has recently appeared in The Huffington Post which discusses rumours of an imminent purge of liberals from Russia’s government.

According to this view Russia’s President Putin is coming under increasing pressure from hardliners within Russia’s political elite to carry out a thorough purge of Atlanticists and liberals within the government.

The hardliners are also supposedly demanding a thorough overhaul of economic policy.  They want Putin to jettison the current liberal oriented free-market policy in favour of an economic mobilisation of the country to withstand the challenge of the West.  The details are sketchy but undoubtedly what is being talked about involves the reintroduction of capital controls and of forms of central planning that go far beyond what Russia has now.

The first point to make about this article in The Huffington Post is that it essentially repeats something that was said a month ago in an article by The Saker published by the Unz Review and on his own website.  The similarity is in fact so great that I find it impossible to put it down to mere coincidence.  There are clearly rumours circulating and both The Saker and the historian Stephen Cohen (the main source for The Huffington Post article) are picking up on them. 

What however are the prospects of a purge of liberals happening in Russia?

The short answer I am sure is none. 

The Saker and the Huffington Post are both right to say that the Russian government headed by Dmitry Medvedev is coming under fierce criticism in Russia, with strongly expressed demands by many people for a radical change of direction. 

They are also both right to say that Putin is not the target of this criticism and that his popularity is unaffected.  Those who criticise the government are not challenging Putin.  Rather they want him – as they think – to be himself by sacking the liberals in his government.

It is also the case that in discussion programmes on Russian television criticisms of the government are being increasingly and fiercely made and that some of these criticisms are being taken up by officials like Bastrykhin, the tough-minded head of Russia’s elite crime-busting agency, the Investigative Committee.

None of this however in my opinion points to a purge being in the works.  It is a fallacy that the media in Russia is tightly controlled and that no unauthorised criticism of the government is allowed on it.  On the contrary the media in Russia – including the television media – is full of debate and criticism, not just of the government but of virtually everything in Russia. 

Russia nowadays has an active and diverse public opinion which is no longer afraid to express itself, and it is a mistake to make assumptions about what is happening inside the Kremlin from the things it says.

I have to say that I get no impression that Putin is thinking of sacking the government or any of the senior officials who are currently being criticised.  On the contrary he repeatedly goes out of his way to signal his support for them.  He did so for example at some length during his recent television marathon.  Moreover his meetings with his officials as reported by his website give every impression of being supportive and cordial.

As for the conduct of the officials themselves, I get no impression from the behaviour of people like Medvedev, Ulyukaev, Siluanov or Nabiullina that they feel themselves to be under pressure or that they consider themselves to be at serious risk of losing their jobs.

There is no reason to think Putin disagrees with the current direction of economic policy.  That can be summarised as an overriding emphasis on inflation reduction (with the aim being to bring inflation down to 4% next year), strict budget discipline and work to improve the business climate, all done in order to foster an increase in the economy’s investment rate. 

All this goes along with a willingness to embrace planning in industrial policy, for example in the aircraft building industry.

I would add that I have seen and heard nothing that suggests the officials and ministers who are being criticised are disloyal to Putin or oppose his foreign or defence policies.  Not one of them has so much as hinted at disagreement with policy towards Crimea, Ukraine or Syria. 

The supposed tension within the government over the size of the military budget looks to me to be overstated and may be a myth. As I have said before claims Kudrin resigned from the Finance Ministry over this issue are wrong.  Claims of disagreement over the size of the military budget are anyway based on the theory Russia is experiencing a budget crisis.  That is simply wrong, just as claims Russia was facing a credit crunch were.

The one major area of disagreement between Putin and his ministers has in the past been over pension policy. 

There is little doubt the government wants to see the pension age raised.  Putin has until recently resisted that idea.  However some months ago he finally signalled that he had come round to it.  It is unlikely to happen before the Presidential election of 2018.

For the rest, Putin has consistently ruled out capital controls, price controls or proposals to raise income tax thresholds, and he undoubtedly supported the decision taken in 2014 to float the rouble.

Putin’s views on the vexed issue of privatisation also seem to be very similar to those of his ministers. 

He is broadly sympathetic to the idea and has shown no wish to reverse the privatisations of the 1990s.  However – to the exasperation of many in the Western investment community – he is no privatisation fanatic and clearly feels the government has a continued role to play in the direct management of key enterprises crucial to the economy.   

Though he welcomes foreign investment in Russia he is clearly determined to keep key sectors such as energy, banking, national infrastructure and key enterprises important to the defence sector under Russian control.   

He has specifically ruled out allowing Western banks from opening branches in Russia.  Whilst Western banks are welcome to work in Russia – and many of them do – their operations have to be regulated by the Russian Central Bank in just the same way as those of Russian banks are.

Similarly, though Putin supports foreign investment in Russia’s energy sector, Gazprom and Rosneft – both state-controlled – remain the dominant players with Gazprom still having a monopoly on gas exports.

There is nothing to suggest that anyone in the government disagrees with any of this.  As I have said previously, Kudrin as Finance Minister supported the project to create national champions in key branches of the economy. 

Today when privatisation is again being discussed it is being proposed – as it was in 2009 – for purely functional reasons – to fill gaps in the budget – not out of some ideological quest to privatise everything.  The government intends to keep blocking shares in all the enterprises involved, whilst Central Bank Chair Nabiullina opposes privatising Sberbank, the country’s biggest bank.

The overwhelming impression is of a united team essentially agreed on the main parameters of economic policy. 

All of them believe in an open economy where prices are decided by the market through supply and demand.  All of them believe in strict monetary and fiscal discipline.  All of them agree that some elements of industrial planning and state control should be retained and are essential at this stage of Russia’s development.

If the team is united why then the talk of a purge?

The short answer is that Russia over the last two years has been in recession.  It is entirely natural during a recession that the country’s government should come under criticism.  It happens in every country.

Though the criticism is loud and strong that does not make it politically dangerous.  There are none of the usual symptoms – mass demonstrations, sit-ins, walkouts, strikes – that point to widespread disaffection. 

The reason for that is not because the Russian people have been zombified by mass propaganda – as the Western media likes to claim – but because of the form the recession has taken. 

Strict financial discipline has paid dividends with a recession that has been relatively shallow with no significant layoffs, bankruptcies, plant closures or mortgage foreclosures. Though incomes took a heavy knock last year because of the inflation spike, employment has remained steady creating confidence that the recession is only temporary.  Importantly the two most socially sensitive sectors – food and housing – continue to boom.

There are also political factors.  The main political effect of the sanctions on Russia is that they lead to Russians blaming the recession not on Putin and the government but on the West.  That in part explains Putin’s extraordinary popularity, though his exceptional political skill, the popularity of many of his policies, and the sense of authority and sheer competence he conveys, would surely have kept him popular anyway.

The fact of Putin’s popularity makes it even less likely he is going to purge his government of people who give every impression of being loyal to him, especially when all the indications are he agrees with them.  His popularity means he is under no pressure to do so. 

With all the indications pointing to the recession being close to its end, it makes no sense for him to carry out such a purge anyway.

This whole issue of the purge is interesting because of what it says about the nature of political debate in Russia. 

It shows that when the government in Russia becomes unpopular the criticism of it that gains traction with the Russian public is that which comes from the patriotic “left” of Russia’s political spectrum rather than from its pro-Western liberal “right”.   On that spectrum Putin and his government are significantly more to the “right” than most Russians would like them to be.  The Western assumption that Putin’s “regime” is preventing Russians from pursuing their natural pro-Western liberal course could not be more wrong.

However those who look for or want a fundamental change in the Russian government’s present makeup or direction are likely to be disappointed.

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Russia calls on US to put a leash on Petro Poroshenko

The West’s pass for Mr. Poroshenko may blow up in NATO’s and the US’s face if the Ukrainian President tries to start a war with Russia.

Seraphim Hanisch

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Russia called on Washington not to ignore the Poroshenko directives creating an active military buildup along the Ukrainian-Donbass frontier, this buildup consisting of Ukrainian forces and right-wing ultranationalists, lest it “trigger the implementation of a bloody scenario”, according to a Dec 11 report from TASS.

The [Russian] Embassy [to the US] urges the US State Department to recognize the presence of US instructors in the zone of combat actions, who are involved in a command and staff and field training of Ukraine’s assault airborne brigades. “We expect that the US will bring to reason its proteges. Their aggressive plans are not only doomed to failure but also run counter to the statements of the administration on its commitment to resolve the conflict in eastern Ukraine by political and diplomatic means,” the statement said.

This warning came after Eduard Basurin, the deputy defense minister of the Donetsk People’s Republic noted that the Ukrainian army was massing troops and materiel for a possible large-scale offensive at the Mariupol section of the contact line in Donbass. According to Basurin, this action is expected to take place on 14 December. TASS offered more details:

According to the DPR’s reconnaissance data, Ukrainian troops plan to seize the DPR’s Novoazovsky and Temanovsky districts and take control over the border section with Russia. The main attack force of over 12,000 servicemen has been deployed along the contact line near the settlements of Novotroitskoye, Shirokino, and Rovnopol. Moreover, more than 50 tanks, 40 multiple missile launcher systems, 180 artillery systems and mortars have been reportedly pulled to the area, Basurin added. Besides, 12 BM-30 Smerch heavy multiple rocket launchers have been sent near Volodarsky.

The DPR has warned about possible provocations plotted by Ukrainian troops several times. Thus, in early December, the DPR’s defense ministry cited reconnaissance data indicating that the Ukrainian military was planning to stage an offensive and deliver an airstrike. At a Contact Group meeting on December 5, DPR’s Foreign Minister Natalia Nikonorova raised the issue of Kiev’s possible use of chemical weapons in the conflict area.

This is a continuation of the reported buildup The Duran reported in this article linked here, and it is a continuation of the full-scale drama that started with the Kerch Strait incident, which itself appears to have been staged by Ukraine’s president Petro Poroshenko. Following that incident, the president was able to get about half of Ukraine placed under a 30-day period of martial law, citing “imminent Russian aggression.”

President Poroshenko is arguably a dangerous man. He appears to be desperate to maintain a hold on power, though his approval numbers and support is abysmally low in Ukraine. While he presents himself as a hero, agitating for armed conflict with Russia and simultaneously interfering in the affairs of the Holy Eastern Orthodox Church, he is actually one of the most dangerous leaders the world has to contend with, precisely because he is unfit to lead.

Such men and women are dangerous because their desperation makes them short-sighted, only concerned about their power and standing.

An irony about this matter is that President Poroshenko appears to be exactly what the EuroMaidan was “supposed” to free Ukraine of; that is, a stooge puppet leader that marches to orders from a foreign power and does nothing for the improvement of the nation and its citizens.

The ouster of Viktor Yanukovich was seen as the sure ticket to “freedom from Russia” for Ukraine, and it may well have been that Mr. Yanukovich was an incompetent leader. However, his removal resulted in a tryannical regíme coming into power, that resulting in the secession of two Ukrainian regions into independent republics and a third secession of strategically super-important Crimea, who voted in a referendum to rejoin Russia.

While this activity was used by the West to try to bolster its own narrative that Russia remains the evil henchman in Europe, the reality of life in Ukraine doesn’t match this allegation at all. A nation that demonstrates such behavior shows that there are many problems, and the nature of these secessions points at a great deal of fear from Russian-speaking Ukrainian people about the government that is supposed to be their own.

President Poroshenko presents a face to the world that the West is apparently willing to support, but the in-country approval of this man as leader speaks volumes. The West’s blind support of him “against Russia” may be one of the most tragic errors yet in Western foreign policy.

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Second Canadian Citizen Disappears In China

According to the he Globe and Mail, the man was identified as Michael Spavor, a Canadian whose company Peaktu Cultural Exchange brings tourists and hockey players into North Korea.

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Via Zerohedge…


For a trade war that was supposed to be between the US and China, Canada has found itself increasingly in the middle of the crossfire. And so after the arrest of a former Canadian diplomat in Beijing in retaliation for the detention of the Huawei CFO in Vancouver, Canada said a second person has been questioned by Chinese authorities, further heightening tensions between the two countries.

The second person reached out to the Canadian government after being questioned by Chinese officials, Foreign Minister Chrystia Freeland said, at which point Canada lost contact with him. His whereabouts are currently unknown and Global Affairs Canada said they are in contact with his family.

“We haven’t been able to make contact with him since he let us know about this,” Freeland told reporters Wednesday in Ottawa. “We are working very hard to ascertain his whereabouts and we have also raised this case with Chinese authorities.”

According to the he Globe and Mail, the man was identified as Michael Spavor, a Canadian whose company Peaktu Cultural Exchange brings tourists and hockey players into North Korea. He gained fame for helping arrange a visit to Pyongyang by former NBA player Dennis Rodman, and he met North Korean leader Kim Jong Un on that trip, the newspaper reported. Attempts to reach Spavor on his contact number either in China, or North Korean went straight to voicemail.

Spavor’s personal Facebook page contains several images of him with North Korean leader Kim Jong-un including one of him with both Jong-un and former Dennis Rodman at an undisclosed location.

Michael P. Spavor, right, pictured here with North Korean leader Kim Jong-un, second from right, and Dennis Rodman.

Another image shows the two sharing a drink on a boat.

The unexplained disappearance takes place after China’s spy agency detained former Canadian diplomat Michael Kovrig in Beijing on Monday, who was on leave from the foreign service. The arrest came nine days after Canada arrested Huawei Chief Financial Officer Meng Wanzhou at the request of U.S. DOJ. While Canada has asked to see the former envoy after it was informed by fax of his arrest, Canada is unaware of Kovrig current whereabouts or the charges he faces.

“Michael did not engage in illegal activities nor did he do anything that endangered Chinese national security,” Rob Malley, chief executive officer of the ICG, said in a written statement. “He was doing what all Crisis Group analysts do: undertaking objective and impartial research.”

One possibility is that Kovrig may have been caught up in recent rule changes in China that affect non-governmental organizations, according to Bloomberg. The ICG wasn’t authorized to do work in China, Foreign Ministry Spokesperson Lu Kang said during a regular press briefing in Beijing Wednesday.

“We welcome foreign travelers. But if they engage in activities that clearly violate Chinese laws and regulations, then it is totally another story,” he said, adding he had no information on Kovrig specifically.

As Bloomberg further notes, foreign non-governmental organizations are now required to register with the Chinese authorities under a 2017 law that subjects them to stringent reporting requirements. Under the law, organizations without a representative office in China must have a government sponsor and a local cooperative partner before conducting activities. ICG said this is the first time they’ve heard such an accusation from the Chinese authorities in a decade of working with the country. The company closed its Beijing operations in December 2016 because of the new Chinese law, according to a statement. Kovrig was working out of the Hong Kong office.

Meanwhile, realizing that it is increasingly bearing the brunt of China’s retaliatory anger, Trudeau’s government distanced itself from Meng’s case, saying it can’t interfere with the courts, but is closely involved in advocating on Kovrig’s behalf.

So far Canada has declined to speculate on whether there was a connection between the Kovrig and Meng cases, with neither Freeland nor Canadian Trade Minister Jim Carr saying Wednesday that there is any indication the cases are related. Then again, it is rather obvious they are. Indeed, Guy Saint-Jacques, who served as ambassador to China from 2012 to 2016 and worked with Kovrig, says the link is clear. “There’s no coincidence with China.”

“In this case, they couldn’t grab a Canadian diplomat because this would have created a major diplomatic incident,” he said. “Going after him I think was their way to send a message to the Canadian government and to put pressure.”

Even though Meng was granted bail late Tuesday, that did not placate China, whose foreign ministry spokesman said that “The Canadian side should correct its mistakes and release Ms. Meng Wanzhou immediately.”

The tension, according to Bloomberg,  may force Canadian companies to reconsider travel to China, and executives traveling to the Asian country will need to exercise extra caution, said Andy Chan, managing partner at Miller Thomson LLP in Vaughan, Ontario.

“Canadian business needs to look at and balance the reasons for the travel’’ between the business case and the “current political environment,’’ Chan said by email. Chinese officials subject business travelers to extra screening and in some case reject them from entering, he said.

Earlier in the day, SCMP reported that Chinese high-tech researchers were told “not to travel to the US unless it’s essential.”

And so, with Meng unlikely to be released from Canada any time soon, expect even more “Chinese (non) coincidences”, until eventually China does detain someone that the US does care about.

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Multipolar World Order in the Making: Qatar Dumps OPEC

Russia and Qatar’s global strategy also brings together and includes partners like Turkey.

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Authored by Federico Pieraccini via The Strategic Culture Foundation:


The decision by Qatar to abandon OPEC threatens to redefine the global energy market, especially in light of Saudi Arabia’s growing difficulties and the growing influence of the Russian Federation in the OPEC+ mechanism.

In a surprising statement, Qatari energy minister Saad al-Kaabi warned OPEC on Monday December 3 that his country had sent all the necessary documentation to start the country’s withdrawal from the oil organization in January 2019. Al-Kaabi stressed that the decision had nothing to do with recent conflicts with Riyadh but was rather a strategic choice by Doha to focus on the production of LNG, which Qatar, together with the Russian Federation, is one of the largest global exporters of. Despite an annual oil extraction rate of only 1.8% of the total of OPEC countries (about 600,000 barrels a day), Qatar is one of the founding members of the organization and has always had a strong political influence on the governance of the organization. In a global context where international relations are entering a multipolar phase, things like cooperation and development become fundamental; so it should not surprise that Doha has decide to abandon OPEC. OPEC is one of the few unipolar organizations that no longer has a meaningful purpose in 2018, given the new realities governing international relations and the importance of the Russian Federation in the oil market.

Besides that, Saudi Arabia requires the organization to maintain a high level of oil production due to pressure coming from Washington to achieve a very low cost per barrel of oil. The US energy strategy targets Iranian and Russian revenue from oil exports, but it also aims to give the US a speedy economic boost. Trump often talks about the price of oil falling as his personal victory. The US imports about 10 million barrels of oil a day, which is why Trump wrongly believes that a decrease in the cost per barrel could favor a boost to the US economy. The economic reality shows a strong correlation between the price of oil and the financial growth of a country, with low prices of crude oil often synonymous of a slowing down in the economy.

It must be remembered that to keep oil prices low, OPEC countries are required to maintain a high rate of production, doubling the damage to themselves. Firstly, they take less income than expected and, secondly, they deplete their oil reserves to favor the strategy imposed by Saudi Arabia on OPEC to please the White House. It is clearly a strategy that for a country like Qatar (and perhaps Venezuela and Iran in the near future) makes little sense, given the diplomatic and commercial rupture with Riyadh stemming from tensions between the Gulf countries.

In contrast, the OPEC+ organization, which also includes other countries like the Russian Federation, Mexico and Kazakhstan, seems to now to determine oil and its cost per barrel. At the moment, OPEC and Russia have agreed to cut production by 1.2 million barrels per day, contradicting Trump’s desire for high oil output.

With this last choice Qatar sends a clear signal to the region and to traditional allies, moving to the side of OPEC+ and bringing its interests closer in line with those of the Russian Federation and its all-encompassing oil and gas strategy, two sectors in which Qatar and Russia dominate market share.

In addition, Russia and Qatar’s global strategy also brings together and includes partners like Turkey (a future energy hub connecting east and west as well as north and south) and Venezuela. In this sense, the meeting between Maduro and Erdogan seems to be a prelude to further reorganization of OPEC and its members.

The declining leadership role of Saudi Arabia in the oil and financial market goes hand in hand with the increase of power that countries like Qatar and Russia in the energy sectors are enjoying. The realignment of energy and finance signals the evident decline of the Israel-US-Saudi Arabia partnership. Not a day goes by without corruption scandals in Israel, accusations against the Saudis over Khashoggi or Yemen, and Trump’s unsuccessful strategies in the commercial, financial or energy arenas. The path this doomed

trio is taking will only procure less influence and power, isolating them more and more from their opponents and even historical allies.

Moscow, Beijing and New Delhi, the Eurasian powerhouses, seem to have every intention, as seen at the trilateral summit in Buenos Aires, of developing the ideal multipolar frameworks to avoid continued US dominance of the oil market through shale revenues or submissive allies as Saudi Arabia, even though the latest spike in production is a clear signal from Riyadh to the USA. In this sense, Qatar’s decision to abandon OPEC and start a complex and historical discussion with Moscow on LNG in the format of an enlarged OPEC marks the definitive decline of Saudi Arabia as a global energy power, to be replaced by Moscow and Doha as the main players in the energy market.

Qatar’s decision is, officially speaking, unconnected to the feud triggered by Saudi Arabia against the small emirate. However, it is evident that a host of factors has led to this historic decision. The unsuccessful military campaign in Yemen has weakened Saudi Arabia on all fronts, especially militarily and economically. The self-inflicted fall in the price of oil is rapidly consuming Saudi currency reserves, now at a new low of less than 500 billion dollars. Events related to Mohammad bin Salman (MBS) have de-legitimized the role of Riyadh in the world as a reliable diplomatic interlocutor. The internal and external repression by the Kingdom has provoked NGOs and governments like Canada’s to issue public rebukes that have done little to help MBS’s precarious position.

In Syria, the victory of Damascus and her allies has consolidated the role of Moscow in the region, increased Iranian influence, and brought Turkey and Qatar to the multipolar side, with Tehran and Moscow now the main players in the Middle East. In terms of military dominance, there has been a clear regional shift from Washington to Moscow; and from an energy perspective, Doha and Moscow are turning out to be the winners, with Riyadh once again on the losing side.

As long as the Saudi royal family continues to please Donald Trump, who is prone to catering to Israeli interests in the region, the situation of the Kingdom will only get worse. The latest agreement on oil production between Moscow and Riyad signals that someone in the Saudi royal family has probably figured this out.

Countries like Turkey, India, China, Russia and Iran understand the advantages of belonging to a multipolar world, thereby providing a collective geopolitical ballast that is mutually beneficial. The energy alignment between Qatar and the Russian Federation seems to support this general direction, a sort of G2 of LNG gas that will only strengthen the position of Moscow on the global chessboard, while guaranteeing a formidable military umbrella for Doha in case of a further worsening of relations between Saudi Arabia and Qatar.

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