A notebook of useful things

Day: 20 June 2012

Great reform for great Russia

In Russia, 7th May was important for two reasons. Vladimir Putin was inaugurated as President for the third time. It was also the 20th anniversary of the official founding of the Russian Armed Forces.

Military reform is likely to feature near the top of Putin’s agenda. But not out of any desire for expansionism or aggressiveness, or any of the nefarious intentions identified by many Western pundits, who cite the tired cliché of the “riddle wrapped within an enigma”. Russia is no enigma. No more than any other nation.

A nation’s pageantry is its declaration of identity. Putin’s swearing-in took place in the magnificent Andreyevsky Hall of the Grand Kremlin Palace. After the ceremony, Patriarch Kirill, head of the Russian Orthodox church, celebrated a prayer service at Moscow’s Cathedral of the Annunciation. This is the new Russia, re-united with its historic identity.

Some vestiges of the Soviet past linger on, out of habit more than anything else. The parade officer addressed the president as Tovarisch Prezident (literally “Comrade President”). But the President’s Guard wore their new uniforms, modelled on those worn by the Russian Imperial Guard until 1914.

Following the collapse of the USSR, it was in the pre-Soviet past that Russia sought its national symbols. All countries do it. Malta’s use of the eight-pointed cross as a brand logo does not mean it is a crusader state. Likewise, the use of imperial Russian symbols is no indication of Russia’s foreign policy intentions.

Putin’s Russia must be understood in the context of four centuries of history. It is neither a continuation of Soviet Russia, nor a young twenty-year old state. It is an old country, with an old civilisation, seeking its rightful place among the nations.

In the Western media, Putin received a great deal of bad press, especially during the election. Yet many ordinary Russians supported his aims, even though they may have questioned his methods. Some Russian commentators have described Putin’s leadership as an imperial understanding of national problems.

Take the way in which Putin dealt with oligarchs. Everyone in Russia felt that the Yeltsin-era privatisation was unjust. Those who got rich in the process began to rule Russia. Under Putin and Medvedev, a new middle class has appeared – small property holders. They appeared during a readjustment of the privatisation process, a new Perestroika, when the oligarchs were removed from the political arena, with many of their assets put back under government control.

Historically, reform in the Russian Federation, as well as its imperial and Soviet predecessors, took place in reaction to crises or defeats. Putin is likely to accelerate the planned reforms of the Russian Armed Forces. In the Five Day War with Georgia in 2008, the military performed well, but forces were slow to deploy. The command structure proved to be too cumbersome, and there were shortcomings in intelligence-gathering and communications.

Shortly after the war, the prime minister’s office and the president decided on a radical reform on the armed forces. The details have not been published, but we are likely to see an acceleration in the professionalisation of the army. The idea is to have a number of well-equipped, highly mobile brigades which can deploy and act rapidly in the regional conflicts which Russia is most likely to face. The army already consists of conscripts (with a reduced conscription period) and a cadre of professional soldiers, NCOs and officers. Some airborne units are now entirely manned by professional soldiers under contract.

What are we to make of these reforms? Nothing, beyond the desire to bring Russia closer to the Western model. Whereas many Western nations built geopolitical relations based on exports of goods or culture, Russia is a relative newcomer in this field. For much of its history, Russia’s engagement with its neighbours was military, either in the form of direct intervention (as in World War II), or in the form of exports of equipment and expertise (as in the post-war period). As a permanent member of the UN Security Council and a country with a vast territory bordered by unstable regions, Russia is seeking to retain its global relevance. Not imperialism then, but simple pragmatism.

The post-Soviet period has added another dimension to Russia’s relations with Europe and the world: energy. Russian gas exports are the energy lynchpin of Europe. To the east, there has been a rapprochement with China in the form of energy deals.

Putin is sometimes accused of imitating Pyotr Stolypin, who tried to accomplish economic and social transformation through nonrevolutionary means in Imperial Russia. In 1907, Stolypin famously rebuked fellow Duma deputies with the words: “You are in need of great upheavals; we are in need of Great Russia.”

Stolypin’s reforms were brutally interrupted by revolutionary turmoil. Putin faces different challenges. But he too wants a great Russia, or at least one that is treated by the West not with condescension, but as an equal partner.


Baldrick’s guide to the global financial crisis


Baldrick: “What I want to know, Sir, is, before there was a Euro there were lots of different types of money that different people used. And now there’s only one type of money that people use. And what I want to know is, how did we get from one state of affairs to the other state of affairs.”

Blackadder: “Baldrick. Do you mean, how did the Euro start?”

Baldrick: “Yes Sir.”

Blackadder: “Well, you see Baldrick, back in the 1980s there were many different countries all running their own finances and using different types of money. On one side you had the major economies of France, Belgium,Holland and Germany, and on the other, the weaker nations of Spain, Greece, Ireland, Italy and Portugal. They got together and decided that it would be much easier for everyone if they could all use the same money, have one Central Bank, and belong to one large club where everyone would be happy. This meant that there could never be a situation whereby financial meltdown would lead to social unrest, mass unemployment and crises.”

Baldrick: “But this is sort of a crisis, isn’t it Sir?”

Blackadder: “That’s right Baldrick. You see, there was only one slight flaw with the plan.”

Baldrick: “What was that then, Sir?”

Blackadder: “It was bollocks.”

This dialogue adapted from Blackadder, currently doing the rounds of the internet, is the simplest and probably the most sensible explanation of the financial crisis ever. If there’s one thing that economists agree on, it’s that they all disagree on the causes and the solutions.

This much is clear : the plan was flawed right from the start.

Once you decide to have a customs union, and an economic union, you either go the whole way or not at all.

The founding fathers of Europe – and I purposely use this word rather than “European Union” – had      a political vision. Somewhere down the road, it was diverted, diluted and debased into a sort of super market union, a “common market”.

But there was no common vision. So the European Economic Community (an unfortunate but apt name), which then became the European Union (political? if only) ambled peaceably along, riven by opposing visions, but held together by layers of bureaucracy and wrappings of red tape. Discussion, rather than action, became the order of the day.

Now this may have been all right for a generation which could still remember the horrors of the Second World War, grateful that at least the enemies of yesteryear were now sitting around the same table. And those were the heady days of European economic reconstruction, when the Western World and Europe had a natural advantage over the Third World, as it was known back then. Governments could spend and expand the welfare state, safe in the knowledge that economic growth would pay for any debt they incurred.

But history has a way of undoing the best-laid plans. A series of events sapped Europe of its confidence: the oil crisis, the increasing gap between government income and expenditure, the population explosion and the meteoric rise of the developing world, which now demands an equal say in world affairs.

Without a common political vision, Europe foundered in a mire of self-doubt, hostage to its own ideals of the universality of human rights, peace and global prosperity.

Talk of silver linings is cheap, so I shall desist. But there if there’s one good thing that has come out of the crisis it’s this: it has made us Europeans question the European Project. The strategic political vision is back in the arena, being debated and, it is hoped, hammered out.

Because the only way in which we can emerge from the crisis is by thinking strategically.

For all the differences between member states, we are all in the same boat. This is not member states against each other, but Europe vs The Rest of the World. Most European leaders ignore, or pretend to ignore, the real cause of the economic crisis and unemployment: an economy bled dry by deindustrialisation, and by negative prospects of sales on the domestic market. Who would want to invest in R&D or equipment, or hire more employees, if the chances of recouping the expenditure through sales are almost nil?

In the Eurozone, we have a common coin but not a common currency. In the European Union, we have a common market but not a common economic strategy.

Blackadder is right. The original plan was bollocks. Now is the time to come up with a new one and strike back. And to aim for nothing less than the New European Century.

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