Friday, October 31, 2014


The Power Vertical

The Pokazukha Liberalization

Televisions in a Moscow shop showing an interview with Russian President Dmitry Medvedev in December 2009.
Televisions in a Moscow shop showing an interview with Russian President Dmitry Medvedev in December 2009.
Is it real or is it pokazukha?

This is usually the first question on the minds of Kremlin-watchers when something happens to suggest high-level infighting among Russia's ruling elite. It comes up whenever there are signs of division in the ruling tandem of Prime Minister Vladimir Putin and President Dmitry Medvedev (and the order I listed them here was no accident). And it certainly should be question number one whenever there are rumblings in or near the corridors of power about liberalizing the system.

Look! Putin and Medvedev sent very different messages about modernization at a State Council meeting. Is a rift really opening up in the tandem over policy? Or is this just for show? Is it real, or is it pokazukha?

Holy cow! Federation Council Speaker and erstwhile Putin ally Sergei Mironov publicly criticized Russia's national leader and then got into a noisy public spat with the ruling Untied Russia party. Is the elite splitting apart at the seams? Or it this just a diversion? Is it real or is it pokazukha?
 
Check this out! On the same day, both Putin and Medvedev both indicated that they will seek the presidency in 2012. Is the tandem on the brink of collapse? Is it real or is it pokazukha?

In a recent article in "Newsweek," Owen Matthews and Anna Nemtsova make a very strong case that for all Medvedev's talk of reform and modernization, in the end it's all just pokazukha.

Here's the money quote, in which Matthews and Nemtsova cite Russian political analyst Olga Kryshtanovskaya (one of Moscow's leading experts on the Kremlin elite):

Far from being challenges to Putin, Medvedev's initiatives, according to Kryshtanovskaya, are all part of a clearly defined plan, called Russia 2020, that was cooked up by the Putin team as long ago as 2005. Phase one, carried out by Putin himself, was to make his hold on power unassailable by bringing all media and political parties under Kremlin control. Phase two, now underway, is to impose a highly controlled version of liberalization from above that will include more freedom of expression, a friendlier face toward the West, and inviting former liberal critics to act as Kremlin advisers.

This highly limited and tightly controlled flirtation with liberalization has been expedited and intensified, the authors argue, because the economic downturn has "forced the government to come up with a new liberal paradigm to dampen flickers of social discontent," with hopes that "allowing a degree of free speech and creating the appearance of responsive government will keep voters happy."

It is also necessary because the ruling elite needs better relations with the West in order to protect the estimated $200 billion to $300 billion that has been skimmed from the Russian economy over the past decade. Here are Matthews and Nemtsova, citing Yelena Panfilova of Transparency International Russia:

To keep these ill-gotten assets safe, Russia's kleptocrats need to ensure that future generations of leaders never try to bring them to justice and that foreigners don't pry too deeply. 'All the Kremlin's money is abroad, and [the siloviki] realize they should make friends with the Americans in order to provide themselves and their money some security,' says Panfilova. The best way to avoid scrutiny is to seem to lead, or at least endorse, the cause of reform—or so the thinking goes.

So I guess we can call what has been going on a "pokazukha liberalization."

It's a bit ironic that Putin and his team, who clearly favor a Yury Andropov-style authoritarian modernization, are now being forced -- albeit temporarily and reluctantly -- to pursue policies more reminiscent of Mikhail Gorbachev's perestroika. And we all remember how that exercise in controlled liberalization turned out.

Truth told, I'm still trying to figure out exactly what is going on here and haven't reached any definitive conclusions. In the past, I have written that Putin and his inner circle were seeking to establish "an enduring political system -- a centralized, authoritarian, vertically integrated and unitary executive that can manage a thorough and comprehensive modernization of Russia." Essentially Andropov's vision of modernization.

I still believe that was the plan. The recent pokazukha liberalization (if you can even call it that) was probably an adjustment brought on by the economic crisis. But I still believe that for the key members of Putin's inner circle -- and certainly for key siloviki like Deputy Prime Minister Igor Sechin -- the goals of the original plan remain intact.

In a recent interview with "Svobodnaya pressa," Moscow-based political analyst Dmitry Oreshkin makes a point that goes to the very heart of why this gang is not going to let its power be whittled away without a fight:

Putin has built a system of government in which a person standing at its top is above the law, parliament, and courts. Above everything, because everything is subordinated to him. Consequently, if you lose this place, a different person comes who is above the law and parliament. The one who has left the place at the pinnacle of the vertical system becomes absolutely defenseless and protected only by good will of the new leader. If this good will runs out, the former leader becomes vulnerable. What is even more dangerous, people from his team also become vulnerable: naked, weak, ones you can do whatever you want with.

This is an option typical of South Korea, where powerful presidents, after they served their term in office, were brought to trial on corruption charges and convicted. This option absolutely does not suit the Putin team. This means that by definition, they cannot leave the vertical system. In the political jargon, it is called the absence of an exit strategy. Vertical models of government in principle provide no exit strategy. In this system, you cannot just go and engage in private affairs, as Bill Clinton did. It is either you command or you are commanded. Therefore, it is not so important whether Putin will run in elections or sends someone else to run for him. It is important that power should remain in the hands of this group.

This is all very true and almost certainly reflects the Kremlin elite's thinking. But the problem is what starts out as pokazukha doesn't always remain that way. Sometimes these things take on a life of their own. Discontent in society is very real. (Kaliningrad anyone?) The middle and lower rungs of the elite are getting very restless. (see Igor Yurgens and his allies) Can those at the higher level be too far behind?

And although oil prices have recovered much of their losses, living standards are not going to improve under the current system as fast as many Russians were led to believe during the heady days of Putin's second term.

Despite the Kremlin's best-laid plans, this all remains very unpredictable and highly unstable.

-- Brian Whitmore

Tags: liberalization,modernization,pokazuka,Vladimir Putin,medvedev

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by: Ray F. from: Lawrence, KS
March 08, 2010 20:43
Good analysis, but I'm left wondering where the line is between pokazyka and reality. Consider our 'cradle of democracy'-Washington, DC. On the surface, sure looks like democracy. Dig a bit deeper, however, and see how the two parties are playing at politics, while working with their pals on Wall Street, to empty the bank accounts of most hard-working Americans. And with the role big money now plays in elections, does it even matter what the average American thinks? He/she will be fed a message to ensure that he never questions the status quo. You're right: Putin and crew are corrupt as sin, but increasingly it feels like the pot is calling the kettle black.

by: Sean from: Moscow, Russia
March 09, 2010 06:39
<i>It's a bit ironic that Putin and his team, who clearly favor a Yury Andropov-style authoritarian modernization, are now being forced -- albeit temporarily and reluctantly -- to pursue policies more reminiscent of Mikhail Gorbachev's perestroika.</i>

This pick-your-GenSek (Stalin, Brezhnev, and now Andropov) vs. Gorbachev metaphor is so tired if only because it is so inaccurate. This liberalization/modernization is more reminiscent of 1905-1914 Tsarist Russia. Putin et al. are conservative Russian liberals--not the liberals you want--but those in the Russian tradition. When you say Andropov, I think of Stolypin and Witte. If you really want to see what conservative liberals are reading, come to a intelligenty bookstore in Moscow and see all the new history books evaluating the post-1905 period. No one is seriously thinking about the 1970s and 1980s.

The people who occupy the Kremlin are more neo-Tsarist than neo-Soviet, but "Soviet" plays a much better political foil in the imagination of Western liberals.

by: God from: Heaven
March 09, 2010 06:39
To add to this article that in Russia there is probably fear in the Kremlin that any social unrest could not only end the power of the siloviki, but bring an end to Russia as a nation. Historically, Russia has always been an empire based on some form of occupation and expansion. Russia expanded eastward beyond the Urals first then moved into the Baltics, Finland, Caucasus, etc. Didn't Kaliningrad used to be called Konigsburg? Didn't Vladivostok used to be part of China (up until the Opium Wars). Even today the Chinese refer to Vladivostok by a different name. This all harks back to the old Russian idea that they are the decendants of Byzantium and the inheritors of the Christian World. The so-called "Third Rome" (Reminds one of "Third Reich"). The last thing the power verticle wants to hear about, is separatist movements in Siberia, Karelia, Caucasus, Kaliningrad, Tatarstan, etc. all going on at the same time. A splintering of an empire with no possible way to stop it. So they will use whatever methods necessary to clamp down on any social unrest. These methods will not succeed forever. The Czar were unable to keep a lid on social unrest and so it will be for the current power verticle. It's as if Putin and Co. are dumping wood on a campfire before an approaching thunderstorm, hoping that a hotter fire won't be washed away by the pouring rain.

by: La Russophobe from: USA
March 09, 2010 09:18
SEAN:

Thanks for the major belly laugh regarding Russians thinking out their new dictatorship by studying "the post-1905 period." What a hoot! Do you have more you could share? Winter doldrums, you know. Or were you simply drunk when you wrote that?

Your haughty, condescending arrogance bespeaks someone of great achievements or a totally pathetic loser. Perhaps you could clarify which one you are?

The people who occupy the Kremlin are more neo-Soviet than neo-Tsarist, but "Tsarist" plays a much better political foil in the imagination of bitter Marxist extremists.

Maybe you haven't noticed, but (a) the ruler of Russia is a proud KGB spy and (b) the music of the national anthem of Russia is same as that of the USSR and (c) the government of Russia is actively rehabilitating Stalin and the Cold War and shooting journalists and sending rival candidates to Siberia.

Now granted, there was some continuity between the institution of the Tsar and the institution of the Politburo, continuity that many Marxist rabble would like to sweep under the carpet. And granted, Putin makes more use of the church than did the Politburo. But that's what NEO-Soviet means, you see. NEW and improved, or so they think.

PS: Your evidence in support of your point is really devastating. Did it take you many years to acquire research skills like those?

by: La Russophobe from: USA
March 09, 2010 09:21
For those interested in reading about the rehabilitation of Stalin in neo-Soviet Russia, from the pages of the Kremlin's own propaganda network no less:

http://russiaprofile.com/page.php?pageid=Politics&articleid=a1267557203

by: Vakhtang
March 09, 2010 12:05
показуха ж. разг. неодобр.
window-dressing
это сплошная показуха — it's all put on; just for show

by: James from: Washington DC
March 09, 2010 13:12
I think that we can often make the mistake of projecting an assumption of overly complex strategic planning in the formation of Russia's current political system, and the gestures toward liberalization being made.

I don't believe that Putin and his inner circle hold "values" of authoritarianism, but rather found it to be the most convenient system of control, patronage, and rent-seeking. If social circumstances provide the opportunity for the expansion of presidential powers, many if not most leaders are bound to take the opportunity (it's also an American tradition from FDR to Bush).

If pursuing a law-abiding, open democratic model were as secure and profitable to Kremlin elites, that's likely the political model we would see. The liberalization effort is similarly an effort to preserve legitimacy of what they have already stolen.

by: Knockout Puncher
March 09, 2010 14:11
Re: Below Comments

Another round of stupidity from a usual source.

Actually, elements within United Russia have shown opposition to portraying Stalin in a more positive light.

Contrary to the often stated mantra, much of contemporary Russia's fareast was never part of China. Russia and China recently signed an agreement ending any formal disagreement over borders. Historically speaking, one can debate whether modern China is such a great successor to the Mongol Empire.

The Russian expansionism point is typical of the hypocritical bunk out there. Imagine if there was land between Hawaii and Califiornia. Meantime, land currently outside Russia seeks to become a part of it, whereas no land in Russia presently seeks to leave that country.

It's great that post-Soviet Russia is taking a more positive view of its pre-Soviet past. It's a good idea to merge the positive attributes of the past in a progressive contemporary mode.

TKO


by: God from: Heaven
March 10, 2010 03:47
Wow, my comment seemed to have frayed some Russophile nerves on this site.
Knockout Puncher:
Russia and other European powers were known in the 19th century to slice off parts of China for themselves. The British had Hong Kong, Portugal had Macau, Russia had Port Arthur, etc. China was forced to hand over Vladivostok to Czarist Russia in the 19th century. Any signed agreements recently have no effect on historical fact. Also, Hitler proved that signed agreements are just pieces of paper, that can be shredded easily. You seemed to confuse China with Mongolia. China is no successor to the Mongolian empire any more Russia is a successor to the Ottoman empire. There are regions seeking to leave Russia. In fact, one did before being re-invaded, its called.....CHECHNYA. Yes, Russians still have 19th century mindset. The de-facto annexation of Abkhazia and S. Ossetia is proof of that. There are Russian nationalists today that actually believe Alaska should be part of "the Fatherland", but the Americans would violently defend one of their 50 States with nuclear force.

by: Knockout Puncher
March 10, 2010 16:46
For whatever reason my last set of comments got knocked downstairs instead of in the order it should be in - in accordance with how some of the other comments typically get posted.

I didn't confuse the Mongol Empire with China. Rather, I suggested how someone else seemingly did at this thread.

Chechnya had a referendum whose result showed support for staying within Russia. The appeal of Chechen separatism has noticeably decreased, due to what happened in two different instances during the last decade, when that republic twice had considerable autonomy. Specifically, mayhem from within Chechnya. What other parts of Russia are seeking to separate from it?

South Ossetia and Abkhazia haven't been "annexed," contrary to the misguided claim to the contrary. Put it this way, has Kosovo been annexed to NATO?

The number of Russians believing that Alaska should be given back to Russia is very small.
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The Power Vertical Feed

In this space, I will regularly comment on events in Russia, repost content and tweets I find interesting and informative, and shamelessly promote myself (and others, whose work I like). The traditional Power Vertical Blog remains for larger and more developed items. The Podcast, of course, will continue to appear every Friday. I hope you find the new Power Vertical Feed to be a useful resource and welcome your feedback. More

18:26

EVENING NEWS ROUNDUP

From RFE/RL's News Desk:

EUROPE PRAISES GAS DEAL, PRESSES RUSSIA ON REBEL VOTES

By RFE/RL

European leaders have welcomed a deal under which Russia is to restore natural-gas supplies to Ukraine but told Vladimir Putin that elections held by pro-Russian separatists in eastern Ukraine on November 2 will be illegitimate.

Russian President Putin, Ukrainian President Petro Poroshenko, German Chancellor Angela Merkel, and French President Francois Hollande spoke in a four-way telephone conversation overnight after Ukraine and Russia sealed a deal meant to guarantee Russian gas supplies to Ukraine through March 2015.

All four leaders welcomed the gas deal signed late on October 30 in Brussels, a German government spokesperson said, and a Kremlin statement called the agreement "an important step in the context of the future provision of uninterrupted transit of gas to Europe."

But a statement from Poroshenko's office said "Ukraine, Germany and France expressed (the) clear common position that they would not recognize the elections planned by separatists."

It said the elections on rebel-held territory in eastern Ukraine's Donetsk and Luhansk regions would contradict an agreement reached in Minsk on September 5 and aimed to end the conflict between Kyiv and the pro-Russian rebels, which has killed more than 3,700 people since April and poisoned East-West ties.

It said Poroshenko, Merkel, and Hollande "urged Russia not to recognize those elections as well."

Merkel's spokesman, Georg Streiter, said that "Merkel and Hollande underlined that there can only be a ballot in line with Ukrainian law."

He said the votes would violate the Minsk agreement and further complicate efforts to find a solution to the crisis in eastern Ukraine.

"The German government will not recognize these illegitimate elections," Streiter told a news conference, adding that European leaders were united on this issue and had agreed on this at a summit last week in Brussels.

Moscow has made no formal recognition of the "people's republics" the separatists have proclaimed in Donetsk and Luhansk, and the Kremlin denies involvement in the conflict despite what Kyiv and NATO say is clear evidence that Russia has sent troops and weapons into Ukraine to help the separatists.

But in comments published on October 28, Russian Foreign Minister Sergei Lavrov said Moscow would "of course recognize the results" of the separatists' elections.

The Kremlin statement about the telephone conversation made no mention of the elections.

It also said the leaders reaffirmed their commitment to the implementation the September 5 agreement, and underscored the need to observe the cease-fire that was central to the Minsk deal.

The Kremlin said Russia believes the "the establishment of a steady dialogue" between Kyiv and the separatists would "undoubtedly" help stabilize the situation.

Kremlin critics say Russia supported the September 5 agreement because it followed rebel gains that left the separatists in control over large portions of Donetsk and Luhansk, potentially giving Moscow a lever of influence on Ukraine for years to come.

The November 2 balloting in the rebel-held regions comes a week after those areas stayed out of voting in in Ukraine's parliamentary election on October 26, in which pro-Western parties won a sweeping victory.

Poroshenko proposed on October 31 that Arseniy Yatsenyuk stay on as prime minister.

"I have proposed that the Petro Poroshenko Bloc put forward Arseniy Yatsenyuk to the post of prime minister," Poroshenko wrote on Twitter.

Yatsenyuk's People's Front party narrowly beat out the Petro Poroshenko Bloc in voting by party in the October 26 election, according to a nearly complete count.

But Poroshenko's bloc fared better in first-past-the-post voting and was positioned to take more parliament seats than the People's Front, according to election commission data.

Yatsenyuk is a vocal critic of Russia and is popular among Western governments for his support for economic reforms.

He is a target of criticism from Russian officials who say the  government that came to power in Ukraine after former president Viktor Yanukovych fled in February in the face of protests seized control in an illegal coup d'etat supported by the West.

Russia annexed the Crimea region from Ukraine in March, adding to tension that increased still further when the conflict in eastern Ukraine erupted the following month.

The hard-fought gas deal provided what European Energy Commissioner Guenther Oettinger called "perhaps the first glimmer of a relaxation" between Ukraine and Russia.

Russia had raised the price it was asking Kyiv pay for gas after Yanukovych's ouster and then stopped supplying gas to Ukraine in June, citing what it said was $5.3 billion in debt and demanding advance payment for any future supplies.

Oettinger said that under the accord, Ukraine will pay Russia $1.45 billion in gas arrears within "days" for Moscow to resume gas deliveries.

He said Russia will then "immediately" lower Ukraine's gas price by 100 dollars per 1,000 cubic meters.

Yatsenyuk, in figures later confirmed by Moscow, said Ukraine would pay $378 per 1,000 cubic meters until the end of 2014 and $365 in the first quarter of 2015.

Kyiv will subsequently have access to Russian gas deliveries in exchange for pre-payment, according to Oettinger.

He said Ukraine also agreed to settle another $1.65 billion in arrears by the end of the year.

The deal is expected to include EU funding to help Ukraine pay.

Oettinger said, "we can guarantee a security of supply over the winter," not only for Ukraine but also for the EU nations closest to the region.

Ukraine normally relies on Russia for about the half the gas it uses, and the onset of winter made the need for a deal more urgent.

Russia also provides about one-third of the gas consumed in the European Union, with about half of that pumped via Ukraine.

The EU was seeking to avoid a repeat of 2006 and 2009, when Russia halted supplies to Ukraine amid price disputes, disrupting deliveries to Europe during two cold winters.

News of the agreement appeared to bring relief in Europe, with British wholesale gas prices for November and December falling to their lowest ever levels on October 31.

(With reporting by Reuters, AP, and AFP)

RUSSIA EXTENDS DETENTION OF ESTONIAN POLICE OFFICER

A Moscow court has extended by two months the detention of an Estonian police officer charged with espionage.

Lefortovo Court spokesperson Yulia Sotnikova said on October 31 that a judge had "granted a request from investigators to prolong the period of detention until January 5" of Eston Kohver.

Kohver was detained on September 5 on espionage charges.

Moscow claims Kohver was seized inside Russia, while Estonian officials say he was captured at gunpoint in Estonia near the border.

The case has strained relations between Russia and Estonia.

The European Union and United States have called for the immediate release of the Estonian security official.

(Based on reporting by Interfax and TASS)

EU FILES WTO TRADE COMPLAINT AGAINST RUSSIA

The European Union has launched a complaint with the World Trade Organization (WTO) over Russian import duties on some European agricultural and manufactured goods.

The Geneva-based international arbitration body said on October 31 that the EU accuses Russia of levying tariffs on several types of goods that are above the legally binding tariff ceilings that Moscow has agreed to within the WTO mechanism.

Those goods include paper and paperboard, palm oil, and refrigerators.

Under WTO rules, the parties have 60 days to work out a mutually agreed solution. After that, the EU could ask the WTO to adjudicate.

The dispute is the fifth involving Russia and the EU at the WTO.

The European Commission's spokesman for trade issues, Wojtek Talko, said the case was not a complaint against the recent ban on Russian food imports from Europe.

(Based on reporting by Reuters and dpa)

RUSSIAN CENTRAL BANK RAISES INTEREST RATES

The Russian central bank said it would raise interest rates from 8 percent to 9.5 percent as Western sanctions and falling oil prices have sent the Russian ruble plummeting.

The Bank of Russia's board of directors made the decision to raise interest rates at an October 31 meeting.

The central bank had increased the rate to 8 percent in late July, following increased to 5.5 percent in March and 7.5 percent in April.

The United States, European Union and other nations have imposed successive rounds of sanctions on Russia over its role in the Ukraine crisis.

Russia annexed the Crimea region from Ukraine in March, and Kyiv and NATO accuse Moscow of aiding pro-Russian separatists with troops and arms during a conflict in eastern Ukraine that has killed more than 3,700 people in eastern Ukraine since April.

(Based on reporting by TASS, Interfax, and AFP)

U.S AMBASSADOR TO KYRGYZSTAN WARNS OF RUSSIAN INFLUENCE

By RFE/RL

The U.S. Ambassador to Kyrgyzstan says that the Central Asian nation's "growing partnership with Russia" presents a challenge to U.S. efforts to support democracy in Kyrgyzstan.

In an article published on the website of the Council of American Ambassadors, Pamela Spratlen (eds: a woman) said the "strong partnership" that Kyrgyz President Almazbek Atambaev has forged with Russian President Vladimir Putin "has had its impact on our efforts."

"It remains an unanswered question how Kyrgyzstan can maintain its democratic trajectory while pursuing this partnership," she said.

Spratlen also said that many in Kyrgyzstan get their news from Russian media, and that in the case of the Ukraine crisis "the strident anti-American tone taken by Russian propaganda has crystallized local public opinion around Moscow's narrative of events there."

Kyrgyzstan has seemed to follow Moscow's lead on several issues recently, including drafting laws that legitimize discrimination against homosexuals and would require foreign-based organizations to register as "foreign agents."

(Based on Spratlen article: https://www.americanambassadors.org/publications/ambassadors-review/fall-2014/democracy-in-central-asia-supporting-kyrgyzstan-s-island-of-democracy)

RUSSIAN ACTOR FIRES MACHINE GUN IN DONETSK

Ukrainian authorities have filed charges and Russia's Union of Journalists is demanding an apology after a prominent Russian actor was filmed firing a machine gun near the Donetsk airport while wearing patches that identified him as a member of the press.

Ukraine's Interior Ministry on October 31 filed criminal charges against Mikhail Porechenkov for the pictures taken with pro-Russian separatists in eastern Ukraine.

Interior Minister Arsen Avakov said on his Facebook page, "Mikhail Porechenkov, present in Donetsk, personally took part in firing on units of Ukraine's armed forces using an automatic weapon."

Pavel Gutiontov of Russia's Union of Journalists called the incident "irresponsible behavior on the part of the actor" and demanded an apology.

Porechenkov said that it was a staged scene, that he was firing blanks, and that the only bullet-resistant vest and helmet he could find were labelled "press."

(Based on reporting by UNIAN, TASS, and Interfax)

09:54

50 RUBLES TO THE DOLLAR?!?

Writing in Slon, Yakov Mirkin, chairman of the Department of International Capital Markets at the Russian Academy of Sciences Insititute of World Economy and International Relations, argued that the ruble could easily sink to 50 to the dollar.

The reasons? 

1) The ruble is overvalued anyway;

2) The dollar is rising against major currencies and this upward cycle is likely to continue;

3) Oil prices are falling;

4) A combination of Western sanctions and diversification of energy supplies

5) Capital flight from Russia continues apace.

And in light of Mirkin's argument, it is worth noting that he has consistently been arguing that the ruble is overvalued. Here he is speaking back in August 2013:

09:41

UKRAINIAN HOSPITALITY

Russian journalist Ivan Sukhov writing in "The Moscow Times" on working in Ukraine:

"Russian journalists encounter no personal aggression while working in Ukraine. Only the rare local politician refuses to speak to Russian reporters.

And in place of perfectly understandable aggression, Russian journalists encounter only gentle Ukrainian hospitality along with a sizable share of condescending sympathy.

It is as if they want to tell us, 'We will stay here, where we have taken the responsibility for our future into our own hands, whereas you will fly home to Russia's stifling political atmosphere, to a country that futilely reconsiders the outcome of the Cold War and the people are caught up in a mass euphoria over the bloodshed in the Donbass.'"

Read it all here.

08:56

MORNING NEWS ROUNDUP

From RFE/RL's News Desk:

RUSSIA, UKRAINE SIGN EU-BROKERED GAS DEAL

By RFE/RL

Moscow and Kyiv have signed a landmark agreement that will guarantee Russian gas deliveries to Ukraine throughout the winter despite tense relations over the fighting in eastern Ukraine.

The EU-brokered deal, which extends until March 2015, was signed at a ceremony in Brussels by the energy ministers of the two countries, Aleksandr Novak and Yuriy Prodan, and European Energy Commissioner Guenther Oettinger.

Outgoing EU Commission President Jose Manuel Barroso, who oversaw the signing, hailed the agreement, saying, "There is now no reason for people in Europe to stay cold this winter."

The hard-fought deal followed months-long EU-mediated negotiations between Moscow and Kyiv amid a long and bitter dispute over payments.

The agreement was reached after two days of marathon talks that had stalled before dawn on October 30 when Russia demanded that the EU first agree with Ukraine how to pay Kyiv's outstanding bills and finance gas deliveries through to March.

Oettinger said that under the accord, Ukraine will pay Russia $1.45 billion in gas arrears within "days" for Moscow to resume gas deliveries.

He said Russia will then "immediately" lower Ukraine's gas price by 100 dollars to around $385 per 1,000 cubic meters.

Kyiv will subsequently have access to Russian gas deliveries in exchange for pre-payment, according to Oettinger. He said Ukraine also agreed to settle another $1.65 billion in arrears by the end of the year.

The deal is expected to include EU funding to help Ukraine pay off its debts to Russia's state-owned gas giant Gazprom.

Oettinger said, "we can guarantee a security of supply over the winter," not only for Ukraine but also for the EU nations closest to the region.

He added that the deal "is perhaps the first glimmer of a relaxation" between Ukraine and Russia.

Ukraine's Prodan said the "decisions taken today will provide energy security for Ukraine and the EU."

Moscow cut off gas deliveries to Ukraine in mid-June, citing a $5.3-billion debt and demanding that Ukraine settle its outstanding bills and pay up front for any future deliveries.

The dispute occurred amid Russia's conflict with Ukraine and Western sanctions imposed on Moscow for its annexation of Crimea in March and its subseqent military and political support for pro-Russian separatists in eastern Ukraine.

With Ukraine relying on Russia for around 50 percent of its gas, the onset of winter made the need for a deal more urgent.

Russia also provides about one-third of the European Union's gas, about half of which is pumped via Ukraine.

The EU was seeking to avoid a repeat of 2006 and 2009 when Russia halted supplies to Ukraine, disrupting deliveries to Europe during two very cold winters.

But Russia's Novak said after the signing that Moscow will remain a "reliable supplier" of energy to Europe and the deal struck with Ukraine will ensure stable gas deliveries over the winter.

In reaction to the deal, the French and German leaders said in a joint statement that the EU will "fully play its role" to implement the gas deal.

Francois Hollande and Angela Merkel said they had spoken with Russian President Vladimir Putin and his Ukrainian counterpart Petro Poroshenko earlier October 30, and all four "have welcomed the conclusion of negotiations on the delivery of Russian gas to Ukraine, achieved thanks to the mediation of the European Union."

(Based on live broadcast, with additional reporting by Reuters, AP, and AFP)

AIR ARMENIA BLAMES RUSSIA FOR FLIGHT SUSPENSIONS

By RFE/RL’s Armenian Service

YEREVAN -- Air Armenia, a passengar and cargo airline based in Yerevan, has suspended all passenger flights until at least December 20 over financial difficulties that the firm is blaming on Russia.

Air Armenia says it is unable continue regular passenger services because of a “panic” among investors and customers over a statement by Russia's federal air navigation service.

Russia's Rosaeronavigatsia announced on September 11 that it would ban Air Armenia from operating flights to Russian cities unless the company paid its outstanding debts by September 21.

Air Armenia said ihe statement damaged its business reputation and that, as a result, its fleet was reduced to one aircraft.

Other than Russian cities, the airline had been flying to Paris, Frankfurt, and Athens.

Air Armenia was founded as a cargo airline in 2003 and began operating commercial passenger flights in 2013 after the bankruptcy of Armavia.

COURT ORDERS NATIONALIZATION OF OLIGARCH'S BASHNEFT SHARES

A Moscow court has ordered the nationalization of a stake in an oil company owned by a detained tycoon.

The Moscow Arbitration Court ruled on October 30 the stake in Bashneft held by billionaire Vladimir Yevtushenkov's holding company Sistema would be returned to the state.

Prosecutors claimed the stake was illegally privatized by officials in Russia's Bashkortostan region.

The court said new claims could be filed after the worth of Sistema's stake in Bashneft was ascertained.

Yevtushenkov was arrested last month on charges of money laundering related to the acquisition of Bashneft.

His arrested sparked speculation that Russia's largest oil company, state-run Rosneft, would acquire Sistema's Bashneft shares.

Yevtushenkov is one of Russia's richest businessmen, with assets estimated to be worth some $9 billion.

(Based on reporting by AFP, rapsinews.ru, and Interfax)

LATVIA-BASED RUSSIAN NEWS PORTAL BLOCKED IN KAZAKHSTAN

By RFE/RL's Kazakh Service

An online Russian news portal based in Latvia has been blocked in Kazakhstan over an article described by Astana as "inflicting ethnic discord."

Kazakhstan's Ministry of Investments and Development said on October 30 that the Meduza.io website published an article "propagating ethnic discord and threatening the territorial integrity" of Kazakhstan.

The article about ethnic Russians living in Kazakhstan's eastern city of Ust-Kamenogorsk (aka Oskemen) is titled: "Ust-Kamenogorsk People's Republic. Are Locals Ready For Polite Green Men?"

‘Green Men’ refers to the deployment in foreign countries of Russian military forces wearing unmarked green uniforms – as Russia has done in the past in regions of Georgia and Ukraine.

The ministry also has filed a lawsuit against Meduza.io in connection with the article.

It says the website will remain blocked in Kazakhstan until a local court rules in the case.

(With reporting by Interfax)

KYRGYZ WILL NEED PASSPORTS TO ENTER RUSSIA

By RFE/RL's Kyrgyz Service

Kyrgyzstan's State Registration Ministry says that as of January 1, 2015, Kyrgyz citizens will no longer be able to enter the Russian Federation using their national identification documents.

Since 2007, Kyrgyz labor migrants have been travelling between the two countries with internal identification documents. Now they will have to obtain travel passports.

The regulation, announced on October 29, will affect hundreds of thousands of Kyrgyz labor migrants who work in Russia and periodically travel between the two countries.

Moscow announced earlier this year that it wants to tighten by 2015 the regulations for entering Russia by nationals of former Soviet republics that are not members of the Russia-led Customs Union and Eurasian Economic Union.

In May, Kyrgyzstan signed a road map under which it is to join the Customs Union, which currently comprises Russia, Belarus, and Kazakhstan, by the end of 2014.  

NATO REPORTS UNUSUAL RUSSIAN WARPLANE ACTIVITY AROUND EUROPE

NATO said on October 29 that it tracked and intercepted four groups of Russian warplanes “conducting significant military manoeuvers” in international airspace close to the borders of the European Union during the previous 24 hours.

NATO’s SHAPE military headquarters in Mons, Belgium said: “These sizeable Russian flights represent an unusual level of air activity over European airspace.”

It said the planes included strategic bombers, fighters, and tanker aircraft.

They were detected over the Baltic Sea, the North Sea, the Atlantic Ocean, and the Black Sea on October 28 and 29.

Russian bombers flew south all the way to international airspace west of Portugal and Spain.

Norwegian, British, Portuguese, German, Danish, and Turkish fighters were scrambled to intercept and identify the Russian planes.

Planes from the non-NATO nations of Finland and Sweden also responded.

Since Russia’s intervention in Ukraine, tensions between NATO and Russia have risen to the highest level since the Cold War.

(Based on reporting by AP and AFP)

18:33 October 29, 2014

EVENING NEWS ROUNDUP

From RFE/RL's News Desk:

KREMLIN MOVES TO QUASH PUTIN HEALTH RUMORS

Vladimir Putin's spokesman said on October 29 that the Russian president is in good health, seeking to quash rumors of an illness.

Dmitry Peskov told reporters in Moscow that "everything is okay" with Putin's health, Russian news agencies Interfax and TASS reported.

"They will wait in vain. May their tongues wither," Peskov said of those who claim Putin is ill.

Peskov spoke after a spate of Russian media reports referring to an October 24 column in the tabloid "New York Post" whose author, Richard Johnson, cited unidentified sources as saying Putin had pancreatic cancer.

Putin and the Kremlin have strongly discouraged reporting about the 62-year-old president's private life.

(Based on reporting by TASS and Interfax)

ROSNEFT THREATENS TO SUE NEWSPAPER OVER SANCTIONS REPORT

Russia's largest oil company, Rosneft, is threatening to sue the Russian daily "Kommersant" for a report alleging Rosneft sent President Vladimir Putin proposals for countersanctions against Western companies and individuals.

"Kommersant" reported on October 29 that state-run Rosneft's proposals include limiting cooperation aboard the International Space Station, prohibiting burial of U.S. and EU nuclear waste in Russia, and possible confiscation of property in Russia owned by Western countries or their citizens.

Putin's spokesman, Dmitry Peskov, denied there were any Rosneft proposals for sanctions, but presidential aide Andrei Belousov and Economy Minister Aleksei Ulyukayev seemed to contradict this.

State-run TASS reported Peskov said reports Rosneft had sent such proposals were untrue.

Peskov said decisions on imposing sanctions were made "in line with the relevant departments, and taken on the level of the government and president."

A different TASS report quoted Belousov as saying, "We are closely studying Rosneft's proposals."

Belousov went on to say, "I would say the radicalism of the proposals for now exceeds the current level of tensions."

The Interfax news agency quoted Ulyukayev as saying the proposals were a "very complex document" and adding, "I don’t think it is grounds for making any decisions."

The "Kommersant" report said "Russian government officials" had provided information about the alleged proposals.

A statement from Rosneft said the company was "deeply shocked" by the "Kommersant" article and might sue the newspaper.

Western governments have imposed several rounds of sanctions on Russia over its annexation of Crimea and support for separatists in eastern Ukraine.

The sanctions target key Russian industries and individuals close to Putin, including Rosneft and its head, Igor Sechin, who is a former Kremlin deputy chief of staff.

The sanctions have hurt Rosneft, which has already requested additional funding from the Russian government to make up for losses incurred due to sanctions.

British oil company BP reported on October 28 that its income from its operations with Rosneft dropped from $808 million in the third quarter of 2013 to $110 million in the same period this year.

(Based on reporting by TASS, Interfax, Reuters, and Kommersant)

WHITE HOUSE DETECTS SUSPICIOUS CYBER ACTIVITY, REPORT BLAMES RUSSIA

The White House says it has taken measures to counter suspicious activity detected on its unclassified computer network.

A White House official would not say who might have been responsible for the activity on what was described as an unclassified computer network used by employees of the Executive Office of the President.

The official, who spoke on condition of anonymity, said the authorities had taken "immediate measures to evaluate and mitigate the activity."

In a report on October 28, the "Washington Post" cited sources as saying hackers believed to be working for the Russian government breached the unclassified computer network in recent weeks.

The White House has declined to comment on the "Washington Post" report.

A U.S. administration official said there were no indications that classified networks had been affected.

(Based on reporting by Reuters, AP, and dpa)

VICTIMS OF STALIN TERROR REMEMBERED IN MOSCOW CEREMONY

By RFE/RL

Activists are gathering near the former KGB headquarters to honor the memory of thousands of men and women executed by Soviet authorities during Josef Stalin's "Great Terror."

Speakers at the daylong ceremony at the Solovetsky Stone memorial on Moscow's Lubyanka Square read out aloud the names, ages, occupations, and dates of executions of some 30,000 people killed by Soviet authorities in 1937-1938.

Muscovites and others brought flowers, pictures of victims and candles to the site of the "Returning the Names" commemoration, which began at 1000 (local time; 0800 Prague time) and was to end at 1000 (local time; 0800 Prague time).

The annual ceremony is organized by Memorial, Russia's oldest and best-known human rights organization, which is under pressure from the government.

On October 10, Russia's Justice Ministry appealed to the Supreme Court to close Memorial.

Memorial has held the ceremony every year since 2006 at the site near the headquarters of the Federal Security Service, the KGB's main successor.

Ceremonies were also being held in other Russian cities.

(Based on live broadcast by october29.ru)

SEPARATISTS SHELL UKRAINIAN TROOPS

Pro-Russian separatists reportedly shelled the position of Ukrainian government troops in southeastern Ukraine on October 29, despite an almost two-month-old cease-fire agreement.

Authorities in the port city of Mariupol say military positions located near the village of Talakovka were targeted on October 29 by conventional artillery and Grad rockets that were fired from from the separatist-controlled region of Donetsk.

Casualties were reported among troops.

The cease-fire agreement signed in early September ended most fighting between the two sides -- although battles at the Donetsk airport, in Mariupol, and in villages near the city of Luhansk continue on an almost daily basis.

The UN says more than 3,700 people have been killed in six months of fighting between government forces and separatists in eastern Ukraine, with hundreds of thousands fleeing their homes.

(Based on reporting by Interfax and UNIAN)

RUSSIAN AIRLINE PLANS YEREVAN-CRIMEA FLIGHTS OVER kYIV'S OBJECTIONS

By RFE/RL's Armenian Service

The Grozny Air civil aviation company, based in the Russia's Chechnya region, is pressing ahead with plans to launch regular flights from Yerevan to Crimea, despite protests from Kyiv.

Timur Shimayev, an executive officer for Grozny Air, told RFE/RL on October 29 that the firm's inaugural flight to Crimea is scheduled for November 17.

But Ukraine's Ambassador to Armenia, Ivan Kukhta, told reporters in Yerevan on October 29 that any commercial flights between Yerevan and Crimea must first be approved by Kyiv.

Kukhta's statement came five days after a spokesman for the Armenian government’s Civil Aviation Department, Ruben Grdzelian, said that a Russian regional airline had not been allowed to launch flights between Armenia and Crimea since the Ukrainian penninsula was annexed by Russia in March.

Moscow's annexation of Crimea has been condemned as illegal by the United States, the European Union, and the United Nations General Assembly.

 

12:55 October 29, 2014

SANCTION THIS!

The Russian daily "Kommersant" reports that the state-run oil giant Rosneft is calling on President Vladimir Putin to impose new sanctions on the West. The new moves reportedly include limiting cooperation aboard the International Space Station, prohibiting burial of U.S. and EU nuclear waste in Russia, and possible confiscation of property in Russia owned by Western countries or their citizens.

12:41 October 29, 2014

AND IN THE FALLOUT DEPARTMENT...

Just a few things I've noticed this morning:

Russian-German Trade Down

German exports to Russia have dropped by more than a quarter, "The Moscow Times" reports. In August, exports from Germany to Russia were 2.3 billion euros, a 26.3 percent decrease from a year ago. Moreover, German exports to Russia fell by 16.6 percent from January-August 2014.

Russian Elite More Cohesive -- For Now

According to a report by Reuters, sanctions have had the "opposite effect to the one intended" among the elite. "Far from dividing those closest to President Vladimir Putin, they have forced the main players in the energy sector to rally behind him. This circle has by necessity become more focused, Western and Russian businessmen, diplomats and politicians said," according to the report.

Sweden Is Warming Up To NATO

Foreign Directors Bail On Russian Firms

Since the start of the year, 14 percent of foreigners serving on the boards of Russian firms have left their posts, "The Moscow Times" reports. "Western sanctions have forced some foreign directors to step down or curb their activities on the boards of publicly traded Russian companies, leaving a critical gap that few domestic candidates are equipped to fill," according to the report.

09:17 October 29, 2014

MORNING NEWS ROUNDUP

From RFE/RL's News Desk:

RUSSIA AND UKRAINE TO RESUME GAS TALKS

Russia and Ukraine are set to resume talks over a gas dispute on October 29 in Brussels.

The new round of negotiations comes after inconclusive talks October 21, when European Energy Commissioner Guenther Oettinger announced some progress, but said a final deal has yet to be agreed.

Russia cut off gas deliveries to Ukraine in mid-June, citing a $5.3-billion debt.

Oettinger said that, as part of tentative deals, Ukraine planned to purchase some 4 billion cubic meters of Russian gas before the end of this year.

Russia on October 21 said the it would sell gas to Ukraine for $385 per 1,000 cubic meters, much lower than the $485 that Russia's state-controlled Gazprom was demanding just weeks ago.

Moscow said that price would be in force from October 2014 until late March 2015 -- but only if Ukraine pays in advance.

(Based on reporting by AFP and AP)

KYIV CONDEMNS MOSCOW'S SUPPORT FOR SEPARATIST ELECTIONS

Ukraine on October 28 condemned as “destructive and provocative” Russia’s support for elections organized by pro-Russian separatists in eastern Ukraine, while the United States said a vote by separatists in eastern Ukraine would be unlawful.

The November 2 vote was scheduled by rebels in defiance of Ukrainian national elections on October 26, which were won by pro-Western parties.

Ukrainian President Petro Poroshenko on October 28 described the vote planned by rebels as "pseudo-elections," saying they "grossly contradict the spirit and letter" of international agreements reached in Minsk in September.

Russian Foreign Minister Sergei Lavrov says Moscow plans to recognize the elections that are being organized by separatists in the Donetsk and Luhansk regions of Ukraine.

Meanwhile, U.S. Secretary of State John Kerry warned that the the vote "will be a clear violation of the commitments made by both Russia and the separatists that it backs in the Minsk agreements."

(Based on reporting by Reuters, AP, AFP, and TASS)

GAZPROM NEFT CHALLENGES EU SANCTIONS IN EUROPEAN COURT

Gazprom Neft, the oil arm of Russia's state-controlled natural gas monopoly Gazprom, said on October 28 that it has challenged European Union sanctions against the firm in the EU’s Court of Justice.

The sanctions against Gazprom Neft were imposed as part of wider restrictions against Russia over its illegal annexation of Crimea from Ukraine and its support for pro-Russian separatists in eastern Ukraine.

The EU sanctions restrict the ability of Gazprom Neft, Russia's fourth biggest oil producer by output, to raise funds on European markets.

The United States also has imposed sanctions against Gazprom Neft in response to Russia’s role in Ukraine’s crisis.

The West says Moscow is supplying arms and troops to help pro-Russian separatists in eastern Ukraine battle Ukrainian government forces.

Moscow denies that, despite increasing evidence to support the charges.

(Based on reporting by Reuters, AP, and TASS)

18:54 October 27, 2014

THE BIG CHILL

Sam Greene, Director of the Russia Institute at King’s College London and author of "Moscow in Movement: Power & Opposition in Putin’s Russia," has a depressing (and must-read) blog post up about his recent trip to Moscow titled: "Russia's Tomorrow, Today."

It opens like this:

The news and the invitation were waiting for me, both, when I got off the plane from London to Moscow. I saw the invitation first—from a long-time colleague, to attend a workshop on the future of Russian politics later this month at Memorial, the venerable Russian historical society and human rights organization. I saw the news two hours later: 17 days after that workshop, Russia’s High Court will hold a hearing on the government’s demand that Memorial be liquidated.

That is the condition of life in Russia these days: two hours in which an invitation takes on a funerary pallor, 17 days in which the world becomes immeasurably smaller. Rarely has the distance between today and tomorrow been so great and so fraught as it is now.

And it concludes like this:

The tomorrow whose arrival now seems inevitable is one in which the archives of Memorial and the Sakharov Center disappear, to be replaced with a single national history textbook and a single national literature textbook, so that the past may have no bearing on the future. It is one in which policy analysis disappears from the public space, along with honest reporting, so that the present may also have no bearing on the future. Tomorrow, when it arrives, will bring one sole purpose: to preserve and protect the status quo. It is a tomorrow after which there are meant to be, politically speaking, no more tomorrows at all..

What the designers of this new tomorrow may not realize, however, is that, once freed from the paralysis of a pointless today, the despair of disaffection becomes the desperation of dissent. Dissidents, pitted against a regime that can never fall, take risks that are unnecessary in a more fluid system. They speak at all costs to demonstrate that they have no voice, and they go to jail to demonstrate that they are not free. Once today becomes tomorrow, and there are no more tomorrows for which to wait, the imperative of immediate action reemerges. 

Is the Kremlin ready for an opposition that, because everything is already lost, has nothing left to lose?

Read it all here.

And a h/t to Ben Judah for flagging.

 

15:42 October 27, 2014

FROM THE YOU-CAN'T-MAKE-THIS-STUFF-UP DEPARTMENT

The Russian health and consumer watchdog Rospotrebnadzor has issued a dire warning: SEFIES CAUSE HEAD LICE!

No, really. I'm serious! It is actually on their official website:

"One reason for the spread of lice among teenagers, in the opinion of experts, is because selfie photographs have become more common. In these group photos, lice are transfered due to the touching of heads."

And it is causing a lot of laughs on the Twitter:

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The Power Vertical is a blog written especially for Russia wonks and obsessive Kremlin watchers by Brian Whitmore. It covers emerging and developing trends in Russian politics, shining a spotlight on the high-stakes power struggles, machinations, and clashing interests that shape Kremlin policy today. Check out The Power Vertical Facebook page or