Democratist

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Archive for June, 2010

The End of the Myth of the “Great Illegals”

Posted by democratist on June 30, 2010

30th June 2010

Democratist has been most interested, and initially somewhat surprised by the timing of the FBI’s decision to arrest and charge 10 people as members of an alleged Russian spy-ring. While Russia’s continuing espionage activities in the US (and elsewhere) should hardly come as a surprise to anyone who has read the August 2009 US National Security Strategy or visited MI5′s snazzy website (including pages handily translated into Welsh) the timing of these arrests, only a week after Medvedev cordially ate burgers with President Obama during his “reset” visit, seems a little puzzling.

While the 10 have not been charged with espionage as such, but the lesser crime of “conspiracy to act as unlawful agents of a foreign government” – which carries a penalty of up to five years in prison, nine of them face far more significant charges of money-laundering,  threatening sentences of up to 20-years. Additionally, the FBI has suggested that none of the information these “illegals”  (individuals spying under a false identity without diplomatic cover or immunity) were tasked with collecting by their masters in Yasenevo was classified. This makes little logical sense as it breaks the so-called “Mossad rule” of espionage; why invest millions of dollars in training these people and putting them in place, only to have them collect information that the SVR and their Kremlin masters could have read in The Economist

Democratist’s best current theory as to what is going on is that the FBI has been onto these “illegals” for a number of years, and has been biding its time as it slowly collected information about the extent of the network and its (apparently rather unimpressive) activities and targets, as well as the evidence required for a prosecution. That the FBI has chosen to prosecute so soon after the recent “reset” summit can only have been authorized at the highest level – and one suspects that President Obama would have been fully aware of the situation as he shared french fries with Medvedev in Washington last week.

It seems therefore that the current arrests and the publicity that will surely surround any subsequent trial are part of a calculated US plan to discredit the SVR at home, and by extension the so-called Siloviki, (the many members of the ruling elite with a background in the KGB and the military - a group informally headed by Prime Minister Vladimir Putin). It appears that enough evidence is in place to allow the FBI to implicate the SVR’s “illegals” in a variety of inglorious, and purely self-serving criminal activities through a lengthy trial, in which the 20-year terms that the accused will face for money-laundering will eclipse the charges they are likely to face for their “official” espionage activities. 

The “great illegals” have long been the subject of largely unmerited Soviet and Russian hagiography (as detailed in The Mitrokhin Archive and elsewhere). It would seem that the FBI’s very public revelations are about to put a serious dent in that image.

Posted in Russian Espionage, US - Russia | Leave a Comment »

Fred Halliday (1946-2010) and the Enduring Relevance of Historical Materialism

Posted by democratist on June 28, 2010

28th June 2010

Fred Halliday (1946-2010) was, among his many other achievements, Montague Burton Professor of International Relations at the London School of Economics (2005-2008) and latterly ICREA research professor at IBEI, the Barcelona Institute for International Studies.

He was an extraordinary polymath and linguist; able to work in at least 10 languages (Persian, Arabic, French, German, Spanish, Catalan, Italian, Russian, Portuguese, and English – and with considerable knowledge of many others - his self-imposed definition of “competence” in a language was the ability to use it to write a book review and give a lecture.

Over the course of a 40-year career he produced 20 books, including Arabia without Sultans (Penguin 1974), Iran: Dictatorship and Development (Penguin 1978), Rethinking International Relations (Macmillan, 1994) Revolution and World Politics: The Rise and Fall of the Sixth Great Power (Macmillan,1999) The World at 2000: Perils and Promises (Palgrave, 2001) and The Middle East in International Relations. Power, Politics and Ideology (Cambridge: Cambridge University Press, 2005). His output of high-quality work was truly impressive; and as of June 2010, at least five new books are still in the process of publication.

Professor Halliday was a great inspiration and mentor for Democratist, both in terms of his dedication to rationality, democracy. human rights, universal values, internationalism and “complex solidarity” with the developing world, and also in relation to the importance of “doing the work” as he put it – the need to study the history, politics and language of the countries concerned (often overlooked by academic International Relations theorists).

Halliday fully understood (in opposition to Waltz and the “Neo-realists”) the importance of looking at both the internal level of analysis (the domestic character of states), as well as the external “systemic” level (state-to-state relations).

In Rethinking International Relations, he proposed elements of  a reformulated historical materialism (shorn of its teleological and other less palatable aspects) as an alternative approach to interpreting the contemporary world.

While Democratist does not consider himself a Marxist, Halliday’s four suggested themes of reconfigured historical materialism certainly bear repeating for those of us who wish to “do the work” of analysing and explaining the historical and political development of the countries we study, and how this influences their international relations;

Determination by socio-economic factors (“material” determination).

The central activity of any society is economic production, and the main analytical questions should be considered in this context: Firstly, what is the “level of production”? Secondly, what are the systems of property and effective control that define ownership of these forces (what are the “relations of production”)? These forces (level and relations of production) combine to form a particular society – feudalism, capitalism etc – and ideas, institutions and events within a social formulation do not take place in isolation from this context.

Seen in this light the study of International Relations is best defined as the study of relations not between states, but between social formations: States should not be seen as an embodiment of national interest, but rather the interests of a specific society or social formation. The history of each state is the history of forms of social power and its legitimization. The contemporary interstate system emerged in the context of the spread of capitalism across the globe, and the subjugation of pre-capitalist societies. The socio-economic system underpins both the character of individual states and their relations to each other.

Historical determination.

The events or character of any society can only be seen in their historical context. Just as society has to be seen in a socio-economic context, so the conditions of the generation of that context, and their contingent location are central to any analysis: To understand a particular contemporary capitalist society, one has to see how it originated and what the problems and tendencies conditioned by the past are, how it limits what people consider their options, and leads them to be influenced by illusions and identifications derived usually unwittingly from the past.

The centrality of social movements in political life, both domestic and international

Classes are defined by reference to their ownership and control of the means of production; a power that is seen as defining the other forms of social power that they excercise. If within a particular state classes act to control those less powerful than themselves, they act internationally to ally with groups similar to themselves when this is beneficial, and to compete with them by peaceful or military means when rivalry is prefered.

Conflict and Revolution

Underlying the myriad events of international affairs lies social conflict, within and across frontiers; the pursuit of wealth and economic power is an important source of these events. Taking the historical determinants of specific states into account, it becomes necessary to enquire out of what historical conflicts they emerged.

Fred will be sadly missed, but the ideas he helped revive and transform will prove highly useful analytical and explanatory tools for those wishing to analyze domestic and international politics for many years to come (its influence should be fairly immediately apparent in many of the articles in this blog, not least Springtime for Dima?).

As he pointed out in Rethinking International Relations, “…historical materialism may prove to be just as relevant as it ever was as an explanatory system, and one that, in origin and development, takes as its starting point and focus of analysis that phenomenon that now more than ever dominates the world, namely capitalism.”

Posted in Book Reviews, Fred Halliday, Historical Materialism, Historical Sociology of International Relations (HSIR) | Leave a Comment »

Modernization, Property Rights and the Russian Middle Class

Posted by democratist on June 20, 2010

20th June 2010

Last Friday (June 18th) President Medvedev used the annual St. Petersburg Economic Forum as a platform for the official launch of his much-anticipated reform programme, which has been designed to attract foreign investment as a basis for the modernization and diversification of the domestic economy.

As such the following reforms have been unveiled; capital gains tax is to be abolished for FDI from 2011; tax breaks will be introduced for innovative companies and educational institutions; the number of firms deemed “strategic” will be cut five-fold (to allow for greater foreign participation); a more relaxed visa policy will be introduced for foreign businesses; and finally assurances have been made that the legal basis needed to fight corruption will be strengthened.

While this is all fine liberal stuff - as far as it goes - those already familiar with this column will not be surprised to hear that Democratist remains profoundly sceptical about the long-term viability of Medvedev’s project. The dominant barrier Russia faces in attracting foreign investment is its extraordinary record on corruption; in 2009 it ranked at 146th (out of 180) in Transparency International’s Corruption Perceptions Index - putting it on a par with Zimbabwe or Sierra Leone, and the idea that the current government is about to seriously tighten up the legal basis for combatting this problem is questionable, to say the very least.

As Sergey Mitrokhin, leader of the marginalized extraparliamentary liberal Yabloko Party recently noted his article Modernization or Stagnation? (June 15th – http://politcom.ru/10274.html) any measures taken under the current regime are likely to remain superficial and short-lived; firstly because a large part of the Russian elite is afraid of change because of the threat of losing property and income accumulated over the last 20 years, and more fundamentally because Russia has not yet managed to develop the kind of politically mature middle class needed to drive any modernization programme forward over the longer-term.

As Mitrokhin states; “The structure of property rights in Russia is reminiscent of an upside-down pyramid; the higher up one is on the social hierarchy, the more property, and the rights to guarantee it one has. The lower one is, the less one has of both…with such an upside-down pyramid, there is no niche for the development of a full-fledged middle class in the country, which in most of the transformed countries was the main social bearer of the modernization project… the elite must give the first impetus, but if this impetus does not have a strong social bearer, then modernization will prove to be “elite-oriented,” and will quickly die out.”

Posted in Historical Materialism, Russian Corruption, Russian Economy, Russian Middle Class, Russian Politics | Leave a Comment »

“Upper-Volta with Missiles” Part Two.

Posted by democratist on June 12, 2010

12th June 2010

Russia is in desperate need of political and economic reform, not least because of the truly monstrous levels of corruption from which it is currently suffering. This corruption has had both a clear impact on Russia’s inability to encourage innovation and growth in the high-tech sector, and also appears to have had a wider impact on domestic demand and investment, which remains sluggish despite some recovery of the economy from the financial crisis.

The Russian government (or at least some within President Medvedev’s “liberal” wing of the regime) have been hoping to resolve these problems by encouraging investment from abroad, but the government as a whole have so far made it clear that it is not really willing to introduce the kind of deep political and economic reforms that would be necessary to deal with the existing “hypercorruption” (in fact it may be incapable of doing so, precisely because the distribution of rents on the basis of loyalty has become a key component of how the Russian government has done business since 2000). 

But without these reforms there is no additional reason for Western firms to invest in Russia – so the expectation that Russia’s problems will be solved by foreign companies is almost certain to fail. This suggests a continued stagnation of the Russian economy and atropying of the non raw-materials sector (and perhaps even the economy as a whole): Russia appears to be slowly collapsing under the weight of its own corruption – and (in the phrase used by The Economist to describe the collapsing USSR in the 1980′s) to be once again firmly on a path to becoming an “Upper-Volta with missles”.

As Dimitri Trenin, of the Carnegie Center Moscow observes “…Russia is sorely lacking what it takes to be a major global economic and political force in the 21st century: Relative energy abundance and nuclear arsenals are simply not enough.”

Without meanngful reform, Russia seems doomed to economic stagnation, increasing international irrelevance and continued social disintegration, as well as (over the longer term) the potential for an eventual reactionary backlash.

In the meantime, the long-suffering Russian people will have to endure many more years of massive hypercorruption under the current regime. This will entail a lack of any real economic diversification or investment in R&D, and the above-mentioned economic stagnation.

Posted in Russian Corruption, Russian Economy | 6 Comments »

Moldova’s Autumn Propects

Posted by democratist on June 10, 2010

10th June 2010

The next few months promise to be an interesting time for the generally ignored Moldovan political scene. What is happening? 

Most people who don’t actually live there don’t spend a lot of time worrying about Moldova; with a population of 3.4 million (about 600,000 of whom are currently working – usually illegally - abroad) and a GDP of only $5.4 bn, it has been easy to overlook this small, mostly agricultural, and very poor country, since it gained independence from the collapsing Soviet Union in August 1991.

Once part of the Roman province of Dacia, Moldova has more often than not been the play-thing of more powerful entities; it was annexed by the Russian Empire in 1812 and known as Bessarabia. Later, in 1920, the (mostly ethnic Romanian) Moldovans took advantage of the Empire’s dissolution to join the Kingdom of Romania. However, they were re-annexed into the USSR (as a result of the Molotov-Ribentrop pact in 1940)  as the “Moldavian Soviet Socialist Republic.” 

Between independence in 1991 and 2009, Moldova was essentially characterized politically by the domination of the Party of Communists of the Republic of Moldova (PCRM) or its allies. Thus all three post-independence Presidents prior to 2009 - Mircea Snegur (1991-1996) Petru Lucinschi (1996-2001) and Vladimir Voronin (2001-2009) were either members of the PCRM, or closely allied to it, and had also all cut their administrative and political teeth in the Communist Party of the Soviet Union (CPSU). Whereas other parties had helped to constitute coalition governments prior to 2001 (and it has to be said that the quality of elections since 1994 has generally been judged to be fairly good by international observers), the political instability of the late 1990′s discredited the other Parties considerably, and the Communists won a crushing majority in the 2001 parliamentary election.

But whereas the PCRM again managed to cobble together the constitutionally required 61 votes (three-fifths of the 101 seat parliament) in order to re-elect the President in 2005, it was (somewhat unexpectedly) unable to manage this after the April 5th 2009 polls (despite gaining a tantalizingly close 60 seats). Subsequently, a second vote took place on 29th July, but this only resulted in a further stalemate, with the PCRM gaining even fewer – only 48 seats, and the four opposition parties together taking 53. 

As of late July 2009 therefore, the non-Communist parties seem to have finally gained the upper hand in Moldovan politics for the first time since independence.  On August 8th they formed a governing coalition, the “Alliance for European Integration” (AEI), and after Voronin resigned from the Presidency on 11th September, he was replaced by acting-President (and leader of the AEI’s Liberal Party) Mihai Ghimpu.

However, the AEI’s two constitutionally permitted attempts  to lure the 8 Communist MPs they additionally required to make up the 61 votes needed to elect a permanent President on 7th November and 10th December 2009 both fell flat. Parliament must therefore be disbanded and new elections held, but, due to constitutional provisions, this cannot not take place until one year after the parliament was last disolved - which is to say until after June 16th 2010. In order to try to bring an end to the current disorder, the AEI has recently called for both a constitutional referendum – which is planned for this coming September (allowing for the direct election of the President), and for subsequent concurrent parliamentary and presidential elections in November (if the initial referendum proves a success).

While it currently seems likely that the constitutional ammendment will pass and the elections take place, the end result is still far from clear; the AEI will have to put forward a single “unity” candidate if it hopes to have a realistic chance of preventing the Communists – still the most popular single party in Moldova - from retaking the Presidency. 

But regardless of the final result, the West will doubtless continue to employ the three major levers of power currently at its disposal in relation to Moldova; the huge attractiveness of the promise of eventual EU membership (over 70% of Moldovans want to join); the new financial influence of the IMF acquired since the 2008 economic crisis, and above all in relation to the forthcoming referendum and elections - the democratic oversight and development role of the OSCE ODIHR. This last factor is especially important for maintaining confidence in the sometimes mistrusted electoral process, and ensuring that Moldovan politics continue to develop within a democratic context.

Posted in Democratization, Elections, Moldova | Leave a Comment »

Hypercorruption

Posted by democratist on June 7, 2010

7th June 2010

Following discussions with colleagues, I thought it might be useful to follow-up my article on the limitations of Russia’s apparent renewed desire for foreign-policy rapprochement with the West Springtime for Dima?  with a couple of additional points on the roots of Russia’s current problems.

To say that Russia has become an enormously corrupt or kleptocratic country is still not really to do justice to the current situation there. In the same way that, in 1999, former French foreign minister Hubert Vedrine coined the term Hyperpuissance (“Hyperpower”) to describe how the US was able to dominate simultaneously in all key areas of international competition at the end of the 20th Century, the almost unique degree (for an industrialized country) and all-pervasiveness of corruption in the contemporary Russian economy surely merits its own categorization; Hypercorruption.

Russia really is a world leader in this regard; in 2009 it ranked at 146th (out of 180) in Transparency International’s Corruption Perceptions Index - on the same footing as Zimbabwe or Sierra Leone, and far behind the other three “BRIC” countries (Brazil, India and China) with whom Russia’s leaders had so enjoyed comparing themselves (in other respects) prior to 2008. It also scored well below a considerable number of more progressive sub-Saharan African countries – including Burkina Faso, Liberia and Rwanda. Transparency International also estimates that corruption costs the Russian economy an astounding $300 billion per year.

Indeed, Russia’s hypercorruption has reached such proportions that it has emerged as the central obstacle to attracting foreign inward investment. In an interview with Reuters earlier this year a representative of the US-based non-profit anti-bribery association TRACE International, noted that things were getting so bad that many Western firms in Russia were starting to reconsider whether they should stay at all.

According to TRACE, whereas more limited corruption patterns in China follow an “inverted pyramid” shape (mostly at the top) and in India mostly at lower levels, Russia is a “solid block” – with corruption effecting every aspect of the economy: “There appears to be sense of near-complete impunity, a sense of entitlement … there is no sympathetic low-level management, no sympathetic mid-level management, or sympathy at the top (for anti-bribery efforts).”

But this attitude should hardly come as a surprise. For just as, since the early 2000′s the Russian authorities have been complicit in the creation of a culture of impunity for those who murder individuals willing to speak out against them (see Paul LeVine’s 2008 book Putin’s Labyrinth for more details), they have been equally complicit in the development of a culture of near-total impunity in relation to corruption - at least for those operating within the system. The reason for this is simple; corruption is a fundamental part of how the nomenklatura rules Russia – and it is intrinsically linked to the operation of the “power-vertical.”

The all-encompassing extent of hypercorruption therefore goes quite a way to explaining why, in the absence of high prices for hydrocarbons and other raw-materials over the past 18 months, Russia is currently expecting its budget deficit to rise to 5% of GDP by the end of the year, and has already started to borrow on sovereign-debt markets. It also explains why Russia is falling so far behind in terms of its industrial, technological and scientific capabilities, and why it is seeking these capabilities through a renewed relationship with the West; hypercorruption has made the Russian economy so sclerotic that, in the absence of raw-materials revenues, the economy is starting to seize up; the corporatist system is starting to show signs that it might collapse in on itself.

But, as I mentioned in my last article, there can be no meaningful economic or political reform under the current regime. The entire governing class is implicated. They will just have to borrow the money from the West, and refrain from the overtly aggressive anti-american rhetoric that has characterised Russian foreign policy since 2004 – at least until the oil price recovers.

Posted in Uncategorized | Leave a Comment »

“Hypercorruption”.

Posted by democratist on June 7, 2010

7th June 2010

After discussions with colleagues, We thought it might be useful to follow-up our article on the limitations of Russia’s apparent renewed desire for foreign-policy rapprochement with the West Springtime for Dima?  with a couple of additional points on the roots of Russia’s current problems, and why I feel western firms will be rather wary of investing there.

To say that Russia has become an enormously corrupt or kleptocratic country is still not really to do justice to the current situation. In the same way that, in 1999, former French foreign minister Hubert Vedrine coined the term Hyperpuissance (“Hyperpower”) to describe how the US was able to dominate simultaneously in all key areas of international competition at the end of the 20th Century, the almost unique degree (for an industrialized country) and all-pervading nature of corruption in the contemporary Russian economy surely merits its own categorization; Hypercorruption.

The greek hyper means “over, beyond or above measure” and in relation to corruption as it has developed in Russia over the last decade it is most apt. Russia really is a world leader in the field; in 2009 it ranked at 146th (out of 180) in Transparency International’s Corruption Perceptions Index - which puts it on a par with Zimbabwe or Sierra Leone, and far behind the other three “BRIC” countries (Brazil, India and China) with whom Russia’s leaders had so enjoyed comparing themselves (in other respects) prior to 2008. It also scored well below a considerable number of more progressive sub-Saharan African countries – including Burkina Faso, Liberia and Rwanda. Transparency International estimates that corruption costs the Russian economy an astounding $300 billion per year.

Indeed, Russia’s hypercorruption has reached such proportions that it has emerged as a central obstacle to attracting foreign inward investment. In an interview with Reuters earlier this year a representative of the US-based non-profit anti-bribery association TRACE International, noted that things were getting so bad that many Western firms in Russia were starting to reconsider whether they should stay at all. According to TRACE, whereas more limited corruption patterns in China follow an “inverted pyramid” shape (mostly at the top) and in India mostly at lower levels, Russia is a “solid block” – with corruption effecting every aspect of the economy: “There appears to be a  sense of near-complete impunity, a sense of entitlement … there is no sympathetic low-level management, no sympathetic mid-level management, or sympathy at the top (for anti-bribery efforts).”

But this attitude should hardly come as a surprise. For just as, since 2000 the Russian authorities have been complicit in the creation of a culture of impunity for those who murder individuals willing to speak out against the regime (see Paul LeVine’s 2008 book Putin’s Labyrinth for more details), they have been equally complicit in the development of a culture of near-total impunity in relation to corruption - at least for those operating within the system. The reason for this is simple; corruption is a fundamental part of how the nomenklatura rules Russia – and the distribution of rents on the basis of loyalty is intrinsically linked to the operation of the “power-vertical.”

The all-encompassing extent of hypercorruption therefore goes quite a way to explaining why, in the absence of high prices for hydrocarbons and other raw-materials over the past 18 months, Russia is currently expecting its budget deficit to rise to 5% of GDP by the end of the year, and has already started to borrow on sovereign-debt markets. It also explains why Russia is falling so far behind in terms of its industrial, technological and scientific capabilities, and why it is seeking to renew these capabilities through a less-than-convincing “reset” with the West; hypercorruption has made the Russian economy so sclerotic that, in the absence of raw-materials revenues, it is starting to seize up; the corporatist system is starting to show signs that it might collapse onto itself.

Posted in Russian Corruption, Russian Economy, Russian Politics | 3 Comments »

Book Review: “Putin’s Labyrinth.”

Posted by democratist on June 6, 2010

June 6th 2010

Over the past couple of days I have been reading “Putin’s Labyrinth” by Steve LeVine (Random House – 2008).

The book provides a good survey of a number of aspects of the domestic development of Russia between Putin’s appointment as PM in 1999, and the rigged elections that installed Dimitry Medvedev as President in March 2008. However, it lacks an especially clear sense of focus; while the over-arching theme is the contempt the the Putin regime for the lives of it’s own citizens, and its complicity in a culture of impunity, and in the encouragement of violence towards those who are prepared to criticise the regime (with interesting and detailed chapters on the Klebnikov, Politkovskaya and Litvinenko cases), the book uncomfortably mixes an attempt to set out a serious history of the period with a disjointed memoir-like quality. And while he certainly provides some illuminating nugets, LeVine tends to be rather selective in his coverage – for example, there is very little about the horrific massacre of school-children in Beslan in 2004 (and contributory ineptitude of the local authorities). This is surprising given the book’s central theme.

While an engaging read, “Putin’s Labyrinth” is therefore more for the seasoned Russia-watcher in search of additional background detail than the beginner.

Posted in Book Reviews, Human Rights | Leave a Comment »

 
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