The commercial corruption in Russia is among
the worst in the world (China being a close second). The companies of both
nations are most often trying to use bribes when operating overseas. In Russia,
the culture of bribery is seen as a defense against government attempts (often
successful) to take over companies. Russia is returning to czarist days in that
respect, where the czar (or his chief ministers, in most cases) could override
commercial contracts and seize assets almost at will. But the government cannot
run these seized firms as well as their managers, so the bureaucrats look about
for new temporary owners (who can operate the firms as long as they make a lot
of money for the bureaucrats, and themselves.) It's not an efficient system,
and now that Russia is competing on world markets, this is becoming a problem.
Many Russians understand that, if you
bring back all the apparatus of the communist police state, you also bring back
poverty and tyranny. But most Russians believe they need the "strong
man" methods to keep order while a truly free and efficient society is
built. A tricky business, but that attitude helps most Russians tolerate the
growing despotism of the government. In recent opinion polls, Josef Stalin, who
played a large role in getting a third of all Russians killed during the communist
period, was voted one of the most admired Russian leaders.
Russia (and China) deny they are the
center of the Internet crime world, but they are. Both nations tolerate large Internet
crime organizations. The ones in Russia specialize in credit card and bank
fraud, while those in China concentrate on stealing data. The gangs in both
countries are believed to do jobs to the government, in return for their
protection. Russia is also trying to control what Russians see on the Internet,
with less success. So the police go after news sources inside Russia that
report things the government would rather remain unreported. It's all becoming
Faced with its first recession in ten
years, the government warned employers to limit firings as much as possible
(those who displease the government in this respect can expect to see their
firm taken over by the government). Economic
growth, at about 8 percent a year until recently, is suddenly at zero, or
worse. Russia gets most of its export revenue, and government income, from oil
exports. After 2000, as the booming economies of India and China demanded more
oil. The $20 a barrel (average) price (which has been pretty steady since the
end of World War II, when adjusted for inflation), skyrocketed to $70 a barrel
by 2006, and spiked at $117 in mid-2008. Since then it has tumbled to below $40
a barrel. The last spike, peaking in late 1979 at $106, declined through the 1980s and played a
role in bankrupting the Soviet Union. Some Russian bureaucrats have a déjà vu
feeling about this. Thus Russia is cooperating with OPEC in cutting oil
shipments, and is considering joining OPEC (which controls 36 percent of world
production, with Russia being the largest single producer, at nearly 10 million
barrels a day, outside the cartel.) Russian politicians are jealous of their
Chinese counterparts, who have created a system that keeps the business
community productive, and in line politically, while keeping the communist bureaucrats
in power. Russia is having a hard time with its business people, and is
suffering more popular unrest than China. The current Russian crackdown on
dissent is mainly intended for those protesting legitimate economic grievances.
The government is bracing for a
recession, one that could see a million or more people losing their jobs, and
many other suffering declines in income. Militarily, this money shortage threatens
the government program to revive the strategic nuclear missile program.
Currently, Russias ICBM arsenal is dying of old age. New missiles are being
built at a rate that will leave Russia with a smaller (a few hundred missile) force
of ICBMs in a decade or two. In practical terms, that's adequate. But in terms
of pride, it's humiliating.
Iran says it is receiving parts of the
S-300 anti-aircraft missile system from Russia. Meanwhile, Russia denies that
Iran is getting the S-300, but admits it is shipping unnamed "defensive
weapons" to Iran.
January 1, 2009: Russia has cut off
natural gas supplies to Ukraine. Russia is demanding that Ukraine pay $2.1
billion in back charges, and higher rates for future shipments. Months of
negotiations failed to achieve an agreement, so Russia is playing hardball.
Ukraine says it has enough reserves to last until April, and will not divert
gas passing through on its way to Western Europe. Russia has threatened war if
Ukraine did that.
December 31, 2008: Russia adopted a six year presidential term,
to replace the four year term. The new measure went through the parliament in
December 30, 2008: A rebel attack in
Dagestan (which is next to Chechnya) left a police general dead.
December 25, 2008: A police operation in Ingushetia (which is
next to Chechnya) left twelve rebels dead. Government corruption, and lack of
economic growth, has led to an increase in crime, and outright rebellion, in
the Caucasus. This is nothing new, but has been a common pattern in the region
December 20, 2008: There was an
explosion in an open air market in Moscow, leaving nine injured. Police
investigators said it was caused by a fire that reached a stock of holiday
fireworks. No terrorist group took credit for the explosion.
December 18, 2008: The government is
donating (at a nominal price to cover shipping and training) ten MiG-29
fighters to Lebanon. The MiG-29 is a Cold War era competitor for the U.S. F-16,
and is seen as a loser inside Russia (the winner being the Su-27/3x series).
December 15, 2008: The parliament has
voted to eliminate juries in treason and terror cases. Anyone the government
doesn't like, and wants to punish or intimidate, is usually charged with
treason. But juries have seen through this, and defied government threats and
acquitted some of the victims. No more. It's easier for the government to order
the judges to find treason defendants guilty after a show trial. This sort of
thing was big during Soviet times, and now it's back. Another old policy that
has been revived is sharp restrictions on public demonstrations. Police are
quick to halt any protests that the government finds particularly irksome.
December 10, 2008: Russian farmers had one of the best crops in
history this year, producing 31 percent more grain (112 million tons) than last
year. But the rest of the world had a good year as well (up about ten percent
over last year), and that brought prices down. So the government is buying up
millions of tons of Russian grain, to prevent many Russian farmers from going
bankrupt. Russian farming is finally recovering from decades of communist decline,
and returning to the pre-World War I era when Russia was one of the major grain
exporters. By the time the Soviet Union fell apart in 1991, Russia had become a
major grain importer.
December 8, 2008: All MiG-29 fighters
were grounded until the cause of a recent crash could be determined. That
MiG-29 went down for unknown reasons, and it's believed possible there is a
design flaw (common to all MiG-29s) responsible.