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Under Putin, Russia is going to be key to all future problems for the world

March 14, 2012 9 comments

The Independent have it today that Putin’s Russia will not stop selling arms to Syria (for fairness!). Why would it? Syria is Russia’s seventh-largest customer in a global market yielding almost $8 billion for Rosoboronexport [Russia's official arms export cooperation] in 2009. Sales to Syria over the past decade have amounted to about 10 percent of Russia’s total weapons exports.

Stanislav Belkovsky, founder and director of Russia’s National Strategy Institute, recently told Haaretz that “the quality of Russian weapons has deteriorated to a point where that is the level of customer that remains. It is a matter of choosing the only possible customer, and without customers for Russia’s military products, he [Putin] will be forced to retrench hundreds of thousands of people working in the industry, which would stir commotion.”

The excuse is clear – we have to sell arms to a despot, else people will lose their jobs and they will punish the government. Unlikely, Putin is looking to be in his high chair until 2024.

Clearly on the back foot Belkovsky said recently, doing his best not to upset Israel, “Even if another leader were to replace Putin, he would be loyal to Israel because these days Muslim immigration is a bigger problem for Russia than anti-Semitism, and that is the dynamic that will develop; Islamophobia will intensify, anti-Semitism will erode” (is this an admission?).

Furthermore, on the question of deteriorating weapons, this discussion came up circa Libya. In order to arm those countries with as little training as possible low-grade weapons need to be sold because that’s what soldiers in Syria would have worked with during their training. It is militaristically expedient for Russia to sell such weapons. But being Russia’s seventh-largest customer, and the money that is changing hands, surely doesn’t just get you bad weapons.

In any case backing despots is consistent with Russia’s master plans today. The UK and the US cavorted with Arab autocrats when they thought, in spite of their corruption, they would bring stability to their countries; now that we know they are only key to instability, so Russia is happy to be the arms dealer of choice.

According to Mark Katz in the US, Russian exports to Iran grew from $249 million in 1995 to $3.3 billion in 2008, all the while Rosoboronexport, the Russian arms export agency, Atomstroyexport, the Russian atomic energy power equipment exporter and Gazprom, in petroleum, will put pressure on continued good relations between Tehran and Putin, not because of peace, but because of business.

Pressure shouldn’t be so difficult here. Though Russia’s official policy on Iran’s nuclear development is that it doesn’t want it to be a nuclear burden on the world, it is far more relaxed than Israel and the US. The relaxation probably comes from oil companies themselves, in whose pockets the Russian government reside. In 2009, while the chips were down for the Russian economy, the government decided to give a tax break to oil companies and, according to Boris Nemtsov and Vladimir Milov, refused to raise rates for Gazprom.

When Putin first came to power, his first move was to give Yeltsin complete immunity, pardoningYeltsin and his family for any and all crimes – apparently including future crimes.” Putin’s crimes against Alexander Litvenko, Anna Politkovskaya and Sergei Magnitsky have been noted as examples of deteriorating human rights in Russia (refusing to release the anti-Putin punks Pussy Riot is another reminder that sticks out) while it punishes its neighbours economically if they don’t follow Russia’s line. Soon after setting out economic plans to save Russia, Putin declared the “dictatorship of the law”. This is the kind of capitalism with dictatorial values we have to look forward to.

Russia is going to be key to all future problems for the world. Bombastic as that sounds, it is true. Its only resolve to some is that it matches authoritarianism with an eye on economic growth – but this is not sound politics. It props up the despots abroad to be lackeys for the future. It votes in the UN with China because they are on the same political path; to take the worst from Communism and apply it to the worst of capitalism. It’s Pinochet’s Chile with global ambitions. If this is the future then stop the world, I want to get off.

Russia’s roaring trade in Syria

February 1, 2012 11 comments

As Shamik Das reported today, Emad Mahou, an activist with the Syrian Revolution Co-ordinators Union, has called for the west to step up pressure on Assad by coordinating a “no-fly zone” after it had come to light that 18 people were killed by the security forces in Zabadani.

It was looking for some time, albeit a brief time, that Zabadani would be to Syria what Benghazi was to Libya – a “safe-zone” in which strategy could be undertaken by rebel forces.

Encouragingly, the Declaration of the Free Local Council of Zabadani concluded (my italics):

Democracy is a new experience and a new born baby that needs attention and everyone knows that they are lacking experience and culture of democracy, and that it is necessary to move to the system of parties. But first an atmosphere of freedom is necessary for different party point of views to form and crystallize…..It is a start, and a successful start if God wills. We want it to be the beginning of the liberation of all lands and people of the homeland who are dear heroes deserving all good, respect and support……and God will bring success……..”

Local leaders of Zabadani have said that it was taken over after a spike in defections from Assad’s army to the rebels. The former were told to go heavy on the area looking for terrorists, but instead a “rare truce” had taken place seeing many turn their arms.

Government presence is reduced to a few buildings on the edge of town, but the question is of course will they let that last? As the escalation today reveals probably not. Given the signficance of Benghzai in Libya, Assad’s troops will know what losing control of such space might mean for rebel confidence.

At the start of January I noted that military intervention from outside would benefit greatly from two things from Syrian rebels – unity on their position of foreign help and a “safe-zone”. On the latter the government is quickly clawing back at the closest Syria has thus far. On the former the tables are turning. There is not full unity yet, and some groupings within the rebels still determined not to have foreign intervention, but pleas from the Syrian Revolution Co-ordinators Union signal progress.

As for the UN resolution, Russia and China said they would veto the draft unless it explicitly rules out military intervention. According to the UN 5,400 have died in Assad’s government’s 10-month crackdown on protesters. But the facts won’t deter Russia – they’ve other priorities.

While Hilary Clinton was finishing giving fresh calls for Assad to stand down and stop the bloodshed, Russia were signining a deal to sell 36 (Yak-130 aircraft) combat jets to Syria.

The deal, as ever, is done with a high amount of risk. Like in Libya, Russia could find itself down the road trying to deal with a Syria, lacking in Russian allies. If Assad was to go, Russia would have to try and ensure Syria does good on the deal – even if the sole purpose of the transaction was essentially to keep Assad in power. At best it could find itself out of pocket.

Moscow-based military analyst, Ruslan Pukhov, said, “This contract carries a very high degree of risk … Assad’s regime may fall and that would lead to financial losses for Russia and also hurt its image.”

But isn’t this why Russia is selling weapons anyway? So as to ensure existing contracts are made good? Russia already has weapons contracts with Syria worthy $5bn – to see those contracts fall into the hands of the rebels would make very bad business.

Syria is Russia’s seventh-largest customer in a global market that yielded almost $8 billion for Rosoboronexport [Russia's official arms export cooperation] in 2009. Sales to Syria over the past decade have amounted to about 10 percent of Russia’s total weapons exports.”

This is the long and short of it. If a resolution fails to go through the UNSC then this will mean further bloodshed in Syria. And one of the reasons a possible resolution will fail is because of Russia – whose concern here is that they don’t lose an ally who does their weapons a roaring trade. It is healthy business for Russia that Assad carries on killing en masse – and they will probably go on about it if a western sanction goes ahead, via illegal routes.

The Putin School of Sound Investment or, I laughed until I cried

September 10, 2011 Leave a comment

While a great many of us watched with pleasure the Arab Spring unfolding, and other similar events in and around the region, others – such as arms dealers – looked on in horror.

Nowhere did this happen with such irony than Libya. Earlier this year Sergei V. Chemezov, the director of the Russian state company in charge of weapons exports, told reporters that Russia can expect to lose $4 billion because of the unrest.

This relates to an “historic” trip taken by Putin to Libya in 2008. One journal has it like this:

Russia canceled Libya’s $4.5 billion debt “in exchange for multibillion-dollar contracts for Russian companies.” Dozens of documents were signed, including a Declaration on strengthening friendship and developing cooperation between the two countries, as well as a number of major contracts.

In January 2010, Putin announced that Russia was to supply Libya with “small-arms and other weapons to the value of $1.8bn (£1.1bn, 1.3bn euros)”. Such investment seemed worth making last year – and it didn’t come cheap cancelling all that debt.

Now, as one news source has put it: “$4 bn down the drain”. The rebels are refusing to “buy weapons from Russia because the country will not need them in the future.” Those weapons might have been used to kill them, the rebels, and now they are refusing to buy them – makes sense to me.

…And I laughed until I cried.

A note on Cuba, the Left and Private Capital

During the recent Communist Party Congress, the ‘cuentapropismo’ initiative was adopted after being presented to the country by the Cuban Trade Unions. It will consist of the legalisation of small enterprises, pertinent at a time when many state jobs are being cut, and the private sector increasingly relied upon.

Parallels are already being made to this initiative and the New Economics Policy (NEP) in Russia circa 1921.

Back then there was an economic crisis of epic proportions, war communism became the bane of the peasantry life, which culminated in mass refusals to plant more food than could be eaten owing to the confiscations by the state. Millions of Russians in the countryside had died from famine, which led to an uprising by the peasants, joined by sailors and other workers against war communism policies, who were eventually defeated by the Red Army in what came to be known as the Kronstadt Rebellion.

The NEP was a policy taken by Lenin to allow private enterprise limited freedom in order to raise productivity; in his words it was taking one step backwards in order to take two steps forwards later. It was not a long-term policy, but its use would take as long as it needed. It has been speculated that had Lenin not died a few years after its inception, and had Stalin not committed to central planning and the dismantling of NEP policies, laws for private capital might have been relaxed way past their eventual demise in 1928.

It was of ethical concern to all those involved with the Communist party – particularly the Left Opposition both within and out of the Bolsheviks – but the concession was that trade unions would protect workers in both the public and private sectors.

However, with the state legislating for the creation of a class enemy within the working class itself – the Nepman (rich business people) or the kulacs (better off peasantry) – and the fact that in 1928 Russian production had begun reaching levels not seen since 1914, the bargaining chip of the trade union within an economy which seems to be working, seems hardly a concession towards the achievement of full socialism.

If Lenin’s policy was towards a capitalism mandated by the state, would he really have bent down to union pressure in the face of workers’ rights versus a productive economy? In other words, since Lenin sacrificed socialism – the project he had worked all his life to pursue – for the gain of production, come what may – would he have sacrificed the conditions of a worker in the private sector, against trade union best wishes, for that same goal of increased industrial and agricultural production?

Unfortunately he died before any substantial answer to this question could be made, but its possibility cannot be ignored.

The difference between Russia and Cuba is that while Lenin freed up capital, not once did he give the impression that he’d stopped believing in the socialist model. However on the other hand, even Fidel Castro has been explicit on this: “the Cuban model doesn’t even work for us anymore”.

This is where the comparison falls short. Lenin believed that a spell of capitalism would increase productivity – and it did – and then they could re-join the road to socialism. Then he died. Raul Castro has mentioned nothing about the cuentapropismo being a short term measure, in fact judging by his brother’s words, it looks quite the opposite. If history is anything to go by, for socialism to return to Cuba, Raul Castro needs to die. But then, perhaps if history is anything to go by, a new economic policy wouldn’t be such a bad thing as far as production is concerned.

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