Impressive. MT @Brown_Moses: Tracking the Buk linked to downing of #MH17 on its travels through rebel-held Ukraine http://t.co/rqL08nBfxX
— Christopher Miller (@ChristopherJM) August 2, 2014
Writing for "The Moscow Times" yesterday, Mark Adomanis poured cold water on the notion that the latest round of sanctions may actually help Russia's economy become more self sufficient:
Many people — particularly those who work in, or are sympathetic to, the Russian government — argue that the sanctions will actually help Russia by forcing it to more intensively develop certain areas of its economy.
Foreign Minister Sergei Lavrov, as usual, provided a clear and concise formulation of the official position: "We will overcome any difficulties that may arise in certain areas of the economy, and maybe we will become more independent and more confident in our own strength."
President Vladimir Putin has gone even further, publicly stating that Russian defense procurement should be an entirely domestic affair and that Russia should "do everything" to ensure that it does "not depend on anyone in any of the areas of the army and fleet rearmament."
"Import substitution" is the latest buzz phrase coming out of the Kremlin, and if sanctions continue to be imposed for any significant length of time, I expect that the Russian authorities will actually try to implement such a policy.
But here's the problem: It won't work. The list of countries that have successfully conducted a policy of import substitution is much shorter than the list of countries that lapsed into pervasive economic stagnation. When the Kremlin thinks "import substitution," it imagines becoming the next South Korea or Taiwan: innovative, dynamic and world-class. The more likely outcome is Argentina: lethargic, overly expensive and anachronistic.
It is theoretically possible, of course, to stimulate domestic production by limiting the availability of foreign goods. If you don't let Russians import chicken legs from the U.S., so the thinking goes, someone will eventually build a poultry plant and produce them in Russia.
To work properly, though, a policy of import substitution requires a liberalized and flexible domestic economy and an efficient, transparent and noncorrupt government. Only with these conditions can truly competitive firms emerge to fill the gap left by foreigners. Otherwise you end up with politically connected and inefficient firms that produce goods that, in comparison with the world market, are too expensive for their actual quality. In other words, if you try import substitution and don't pull it off, you end up with a perfect recipe for economic stagnation.
Read the entire article here
Our news desk has just issued this update concerning the MH17 crash site:
The Organization for Security and Cooperation in Europe (OSCE) says international experts have returned for a second day to the crash site of Flight MH17 in separatist-controlled eastern Ukraine.
The OSCE mission to Ukraine said in a statement that 70 Dutch and Australian experts were accompanied by eight OSCE observers.
The experts brought specially trained dogs with them to help them trace and recover the remaining bodies of the victims of the July 17 crash, in which all 298 people on board the Malaysia Airlines plane died.
The experts, who began work at the crash site yesterday, are expected to conduct search operations in several places at the crash site.
Efforts to recover the remaining bodies from location have been hampered by fighting between Ukrainian forces and pro-Russian separatists.
Over 200 coffins have been sent back to the Netherlands, which lost 193 citizens in the crash.
(ITAR-TASS, Interfax)
DVI = Disaster Victim Identification. Search & victim recovery current focus intl experts @ #MH17 site. They accompanied @OSCE_SMM monitors
— Michael Bociurkiw (@mikeybbq) August 2, 2014
This item has been buzzing around social media this morning. It's not yet possible to confirm its veracity, but it's very disturbing if true:
BREAKING #RUS terrorists have started to use child soldiers. This is 15 year old Andrey http://t.co/tGnbsJl17H pic.twitter.com/Y8Z5CMJJHp
— lennutrajektoor (@lennutrajektoor) August 2, 2014
Good morning. We'll start the live blog today with this item from RFE/RL's news desk:
Britain's Prime Minister David Cameron has warned that NATO needs to review its long-term relationship with Russia to reflect the fact that Moscow sees the alliance as “an adversary.”
In a letter to other NATO leaders and the alliance's Secretary-General Anders Fogh Rasmussen ahead of a summit in Britain next month, Cameron said the alliance must change to be able to better defend its members from a potential Russian military threat.
According to Cameron, NATO has to be a "robust presence" in Eastern Europe because of Russia's "illegal” actions in Ukraine.
He proposed drafting a new schedule of military exercises, pre-positioning equipment and supplies, and enhancing the NATO Response Force of up to 25,000 troops.
The alliance has suspended all practical cooperation with Russia and stepped up exercises in Eastern Europe after Moscow's annexation of Crimea in March.
(Reuters, BBC)
This ends our live-blogging for August 1. Be sure to check back tomorrow for more of our continuing coverage.
From our news desk:
President Barack Obama has said the United States has done everything it can to convince Russia to change course in Ukraine, where the government is battling pro-Russian separatists.
Speaking at the White House on August 1, Obama said sanctions have imposed sufficient costs on Russia and that should lead Putin to want to resolve the Ukraine crisis.
But he said the Russian president is working contrary to the best interests of his country, adding, "Sometimes people don't always act rationally."
Earlier, the Kremlin quoted Putin as telling Obama during a telephone conversation that Western sanctions against his country are "counterproductive."
Meanwhile, U.S. Vice President Joe Biden told Ukrainian President Petro Poroshenko the United States will provide $8 million in new assistance to bolster Ukraine's border security. (AP, Reuters, and ITAR-TASS)
From our news desk:
Ukrainian President Petro Poroshenko has said his country will conduct early parliamentary elections, adding the military conflict with pro-Russian separatists in the east of the country must not be allowed to delay economic reforms.
"War is not a reason to delay reforms," Poroshenko said during a television interview on August 1.
He then said, "In autumn there will be a new parliament that will start of reforms" without giving any information about a possible date for the poll.
Poroshenko was widely expected to call for early parliamentary elections, originally scheduled for February 2017, after the dissolution of the ruling majority coalition in parliament on July 24 paved the way for new elections.
Poroshenko also signed new legislation passed on July 31 on the budget that provides for increased funding for the military. (UNIAN, Reuters, and AFP)