Email This Post - Print This Post Print This Post

ERIC KRAUS & ALEXANDER TEDDY
krausmoscow@yahoo.com
DESK NOTE
12 DECEMBER 2011

Russian Facebook Protest – A Field of Dreams


Just as we were readying our China report, T&B has been distracted by the brouhaha around the Russian Duma elections, an event we awaited with all the breathless expectation ordinarily devoted to watching grass grow. We find the results of said election very unfortunate, although certainly not for the reason given in the corrupt Western press.

As a truly wonderful example of the dishonesty of Western media – this one is hard to beat: Wishing to show footage of Moscow burning due to a popular uprising against the Putin government, but sadly lacking in any rioting to show, Fox News took the simple expedient of running footage recently shot in Athens, then claiming it was taken in Moscow… alas, they omitted to blank out the Greek alphabet. We nit you shot! http://rt.com/news/fox-moscow-fake-riots-281/

The first instance of fraud was, as per usual, most of the Western reporting on the elections. What is most striking is that virtually no one stated the obvious conclusion – that Russians had voted against the liberalizing tendency expressed by Medvedev, voting instead for (unreformed) Communists and the hard-line Nationalists. While the results have been criticised for fraud, in fact, outside of the Caucasus Republics, official results were reasonably close to those predicted both by the preelectoral opinion polls and by the exit polls (those needing greater granularity should have a look at Gordon Hahn’s paper – http://www.russiaotherpointsofview.com).

While there were certainly instances of fraud, it seems unlikely that these had more than a marginal effect upon the outcome. The Communist Party was the main victor, closely followed by the protofascist LDPR. The liberal opposition beloved of the West was crushed – reduced to a mere rounding error (3% for Yabloko, <1% for Right Cause). The Communists took 20%, the nationalist/proto-fascist LDPR (slogan: Russia for the Russians!) took 13%. Putin’s ruling party indeed suffered a blow, although still preserving a simple majority of Duma seats. The results were a slap in the face, not so much for Vladimir Putin as for to his creature – Dmitri Medvedev. T&B had always felt that “operation Medvedev” was a clumsy, easily avoidable error. President Putin could have simply submitted a constitutional amendment to nullify presidential term limits, winning the vote hands down and continuing in power without interruption; whether or not this pleased the West is irrelevant. Instead, his elevation of the lame and unpopular Medvedev, totally enamoured with Western institutions and with no political base in Russia, was widely seen as a transparent charade, confirmed when the latter dutifully gave back a presidency, which should never have been his to begin with. T&B is on the record stating that Medvedev would almost certainly not finish his prime-ministerial term, and indeed, that there was a meaningful probability that he would never actually begin it; this probability has now increased quite substantially.  

The Facebook Delusion

The Left reads only the Left… the Right doesn’t read at all!
Anon – American Political Lore

We would remind our many Russian friends who have expressed their vehement opposition to the reelection of Vladimir Putin of the old adage “Beware of what you want – you might just get it!” With this wish, they wilfully ignore a fundamental and deeply inconvenient truth: were Putin to unexpectedly retire from the scene, his place would be taken not by the polite, English-speaking, upper middle class liberal opposition personified by Yabloko’s G. Yavlinsky – nor even by the ad hoc right-wing opposition – the corrupt Kasyanov, the fascist Limonov, the insane Kasparov, the profoundly stupid Nemtsov – but rather by a Red/Brown coalition, the liberal’s own worst nightmare.

During the 19th century, idealistic young Russians “went to the people”, i.e. departing for the countryside where they sought to enlighten and radicalize the deeply conservative peasantry. For their pains, they were as often as not beaten, hog-tied, and turned over to the Tsarist police by the very peasants they had sought to liberate – deeply suspicious of the city dwellers and their alien ideas. This lesson has apparently been lost upon some of our Russian peers.

The fundamental problem for the Facebook generation now agitating for Democracy and political change is that, akin to America’s East-coast liberals, they are isolated and alienated from the great majority of their own countrymen, as well as being dangerously imbued with a sense of their own superiority; unlike their American brethren, however, the Russian Facebook generation actually pushes the delusional to the extent of believing themselves to represent a majority; T&B wishes we had a dollar for every Muscovite who has told us “well, everyone I know voted for Yabloko!” – alas, that simply proves our point…

The reader probably knows that Putin was recently booed at a martial arts championship – what Western coverage omits to mention is that the tickets to said fight cost several hundred dollars each – i.e. more than a month’s minimum pension (thanks to Charles Ganske for pointing this out). Those booing Putin were wealthy, hard-right nationalists fond of manly combat sports, and who back the LDPR’s Zhirinovsky… certainly not the liberals beloved of Washington and Brussels.

At the risk of belabouring our point, by no stretch of the imagination is the Russian body politic neoliberal, enamoured of Western models, nor amenable to the internationalism of the EU. Outside of a tiny sliver of Moscow’s would-be intelligentsia, the reader will encounter precious few Ayn Rand fans in Russia. Capitalism and Western-style liberalism acquired a bad reputation during the Yeltsin years. The Duma election results were unambiguous – again, those nice, house-trained liberals of Yabloko won a thumping 3% of the vote. The victors were parties deeply hostile to Western interests.

Perhaps the fundamental problem has been in Putin’s attempt to keep one foot in each camp – paying lip-service to ideals of Western democracy – almost comically unsuited for the realities of a country still emerging from centuries of dysfunctional governance and catastrophic ideological experimentation. “Operation Medvedev” was an obvious failure – Putin could have easily enough revised the constitution and succeeded himself as president with a very comfortable mandate; instead the charade simply irritated all sides.
 

Back in the USSR?

We have long warned those in the West who persist in asserting that the Russian people were ready to rise up and overthrow the Putin administration in favour of a new regime ready to replicate the disastrous policies of the Yeltsin years that they were smoking dope. Indeed, from the foreign policy standpoint, Vladimir Putin was perhaps the West’s best hope for a reasonably cooperative Russia – ready to collaborate on the basis of hard bargaining over opposing national priorities as well as working towards a number of shared policy objectives.

Thankfully, while the Putin government has suffered a setback, it is far from fatal. United Russia will have a bit more than a simple majority of Duma deputies, and were it necessary to modify the constitution, given the “administrative resources” at their disposal, they would have little trouble in attracting sufficient refugees from the fragmented Red/Brown opposition – who have always been available for rental.

Putin’s own plans for presidential succession are, of course, unchanged – there is no single politician in Russia with a prayer of outpolling him. That said, preserving popularity during his next mandate will be a challenge, as Russian GDP growth slows to 4%-5%, in large part due to incompetent financial governance in the West (the sovereign debt crisis of Europe and America). The ability of the next government to enact the sort of unpopular reforms that have led to such havoc in Europe may be constrained by the recent electoral results.

We had previously speculated that Putin was ready to jettison the very unpopular Medvedev following a convenient electoral defeat for United Russia; in fact, Putin’s support for United Russia’s campaign always appeared somewhat tepid. Alas, our preferred replacement – Alexei Kudrin – is not the sort of populist, inspirational leader who could easily pick up the mantle and win back Zhirinovsky’s electorate. The prime-ministerial position is now in play.

It would appear prudent for President Putin to take into account the verdict of the polls following his own re-election, forming a new government embracing at least some of the ideas of the leftist/nationalist opposition: a more assertive foreign policy with a more confrontational approach to NATO, closer integration of the CIS, more restrictive immigration policy, more social redistribution of wealth, and higher government spending. This is likely to represent a moderate inflection of the current government line, rather than an entirely new policy direction… or so we would hope.
 

Into the Shining Past?

None of the above is meant to suggest that the current Russian political system is ultimately sustainable. Vladimir Putin is mortal – and unlike China, which has succeeded in developing a political system whereby the individual office-holders can be renewed and replaced while maintaining continuity of the political line, there is a total political vacuum outside of the opportunistic and servile United Russia.

The Chinese model is not transferable – the Russian Communist Party was totally discredited during the breakup of the USSR, with a nominally democratic political model edicted in its place. In the absence of a reasonable body-politic and a stable middle-class electorate, we see little basis for stable Western style parliamentary governance. Continue with the outward trappings for long enough and the political drift towards the Russian historical tradition could produce an outcome which would leave the Western powers nostalgic for the stability of the relatively friendly and predictable Putin government.

Those familiar with Russia’s 19th century history cannot fail to see the parallels. An ineffectual liberal opposition, almost Fabien in its outlook and obsessed with maintaining its own ideological purity, was totally unwilling to compromise with what they saw as the corrupt Tsarist establishment, choosing instead to go into a sterile and destructive opposition. Russia was thus left with only two political forces of any consequence – the ultramontane Tsarist right, and the radicals who ultimately formed the hard-core Bolshevik faction. The outcome was not a happy one.

When challenged with the question of how Russia would develop a credible opposition, we must admit that we simply do not know. We had assumed that given a long enough period of economic stability, a rising middle-class would develop its own political institutions. Thus far, we see little evidence of this actually occurring.

Eric Kraus & Alexander Teddy
 

Appendix

While the reader can be forgiven for believing Leonard Cohen to be Canada’s sole contribution to global culture, Patrick Armstrong is another wonderfully insightful Canadian export. A long-serving Canadian diplomat in Moscow, Patrick continues to issue a weekly summary of events Russian – a welcome voice of sanity amidst all the idiocy one finds in the press. His work can be found on the very useful http://www.russiaotherpointsofview.com/

Below, we reproduce his discussion of the Russian election:

RUSSIAN FEDERATION SITREP 8 December 2011
ELECTION RESULTS. The almost final results give a Duma with 238 seats for United Russia (down 77); 92 Communists (up 35); 64 Just Russia (up 26) and 56 Zhirinovskiy’s party (up 16). (Interactive map by regions). United Russia will dominate, but no longer be able to bully. Which is a step in the right direction.

ELECTION FRAUD. There is a lot from the usual media outlets about widespread, even game-changing, fakery. I would suggest that those who believe this reflect on what might be termed the Prime Law of Election Fixing: Don’t fix it so that your party loses votes and seats. Especially when they have been saying that every previous Russian election was fraudulent. This should be obvious to anyone. Secondly the results accord well (as previous elections have) with opinion polling (indeed United Russia did a bit worse). This piece shows that the results are consistent with numerous polls (here’s a reasonably perceptive forecast from two months earlier and another, based on polls, from the day before). To persist in assertions of game-changing fraud in the face of these facts is just ridiculous. By the way, if you go by the English-speaking media you would think that foreign observers thought the elections were frightful: not so, here are a number of foreign observers saying that they were good enough. The OSCE report does not suggest big-scale fixing either; indeed it reads like other OSCE reports: administrative resources, lack of competition, some bad behaviour.

LOGIC. There is a simple point of logic here, I think. Opinion polls told us that United Russia was sinking and that even Putin’s ratings had declined. This is the factual basis for pieces like this one. So far so good. But to then to claim that the election was so fraudulent that – that what? the Communists actually won? United Russia gave itself 10-20-30 points? Enough to get a majority? – contradicts the very opinion polls that were the basis for the first observation. (Was there cheating? Of course there was, and not just by United Russia. There’s cheating in all elections everywhere. Enough to be a game-changer? I doubt it.)

IMPLICATIONS. Half the vote is hardly a repudiation of United Russia but such a reduction is hardly an endorsement either. For some months opinion polls have been showing a weariness with this assemblage of power-worshippers. It is a wake-up call. I would expect more “retirements” of officials: not because they failed to cook the results but because they have been repudiated by the electorate. I do not believe that it will affect the presidential vote greatly (opinion polls again: The Team’s ratings are still pretty high) but it might/might result in Putin having to go to a second round of voting. On the other hand, given that the number two candidate will probably be Zyuganov of the Communists, it might not. However tired Russians may be of Putin, they must be even more tired of Zyuganov who ran for President in 1996, 2000 and 2008. To say nothing of Yavlinskiy (1996 and 2000) and Zhirinovskiy (1991, 1996, 2000 and 2008). Of these, Putin is certainly the least stale. But I still think he should have retired. At any rate both Medvedev and Putin are taking it pretty calmly; but, given the polls, they must have seen it coming. And, once again, the “liberals”, so beloved of the West, failed. Here, as a change from “Putin stole it”, is a piece saying the Communists are back.

Readers are welcome to forward T&B to any party who might be interested. We write to be read! Comments should be directed to Eric Kraus, on eric@nikitskycapital.com or krausmoscow@yahoo.com

PLEASE JOIN US ON THE T&B WEBSITE – www.truthandbeauty.ru – where you will find back issues, articles of interest, and some lively debate. Readers are encouraged to contribute their views, or suggest articles or research to post.

This message is provided for informational purposes and neither the information nor any opinion expressed herein constitutes an offer, or an invitation to make an offer, to buy or sell any investment funds, securities or any options, futures or other derivatives related to such securities.

Investment in emerging markets bears a high degree of risk, and is not suitable for all investors. This report is based upon information we believe to be reliable, however it is provided solely as an intellectual exercise, and no investment decisions whatsoever should be based upon it, in full or in part. In particular, investing in securities, including Emerging Markets securities involves a great deal of risk and investors should perform their own due diligence before investing.

Past performance is not necessarily a guide to future performance. Some investments may be subject to sudden and large falls in value and on realization customers may receive less than they invested or may be required to pay more. Changes in foreign exchange rates, interest rates, or other financial parameters may have an adverse effect on the price, value or needs of customers. We would recommend that investors take financial advice as to the implications, including taxation, of investing in any financial product.

Some investments may not be readily realizable and valuing the investment and identifying the risk to which customers are exposed may be difficult to quantify. It should be assumed that the author and/or the funds he advises will from time to time have long or short positions in any of the assets discussed, or derivatives thereof. These positions may at times be contrary to the views expressed. Like cats and horses, markets – whether emerging or emerged, are apt to do as they damned well choose, and a considerable measure of luck is required to come out in one piece. Exercise caution in all things. Good Luck!

Eric Kraus © 2011.

Leave a Reply