I tend to the view that Russia represents a sort of unmentionable scar – particularly for the neoliberal consensus which is currently coughing up its grip on the developed world – and a vague sense of regret, that, but for a host of decisions which seemed plausible enough at the time, the world may have a completely different Russia to engage with currently. I would also add that if you stripped that sentiment back you would come awfully close to the possibility that the Western world (and mainly the US – UK nexus) has completely fucked its handling of Russia, and the former Soviet Union, and that the chickens of that mishandling are still coming home to roost.

On the day Mikhail Gorbachev meandered off into history to leave the stage to Boris Yeltsin, the United States and the Western world had an opportunity. They could invest in ensuring that the dismantling of the Soviet Union was orderly and delivered benefits to the people of the former Soviet Union, or they could pocket the windfall of a reduced geopolitical spending requirement, and leave the peoples of the former Soviet Union to sink or swim of their own accord as they addressed the immense challenges of the end of the centrally planned era.

Even Donald the ‘Pussygrabber’ would be unlikely to completely mishandle the Russian relationship as much as his predecessors.

Looking back from 2016 it is pretty easy to see they largely adopted the sink or swim approach. Eastern Germany, the Baltic states (Estonia, Latvia, Lithuania), the Czech Republic and Hungary, represent plausible success stories where former Soviet nations have largely transitioned into functioning western style democracies (though all have their issues), and you could make a case for Poland and Slovakia (though you’d have to ask questions about the way vested interests in both nations have shaped their polities).

The rest is largely a tragedy. Bulgaria and Romania so beset by corruption that the EU is still baulking at complete integration, Moldova so poverty stricken people smugglers use it as a cheap way station, Belarus still trapped in a time warp of Lukashenko, Georgia, Armenia and Azerbaijan still trapped in a world of ethnic rivalries, corruption and local strongmen, Tajikstan, Uzbekistan, Turkmenistan, Kyrgyzstan and Kazakhstan one party states largely still run by the descendants of those who were there in power when Mikhail told them they were on their own, mainly marked by violent, capricious, corruption riddled regimes.

Next cab off the rank is Ukraine, where the Soviets in power in 1990 simply became ‘nationalists’ and birthed the most spectacular failed state on the planet. They’ve driven the living standards of a people who have fertile agriculture, commodity resources, a significant industrial base, and strong cultural and economic ties into Europe, backwards for 15 years after nationhood, and handed control of the nation to a self-serving batch of maybe 500 corrupt oligarchs, prepared to hold their nation, every nation with whom they engage, and the EU, to ransom to extort further cash, while treating everyday Ukrainians with contempt.

  A collection of Oligarchs currently raping Ukraine while ostensibly governing it

Finally we come to Russia. They got, from 1991, 9 years of complete chaos in the form of dysfunctional parliaments, impotent regulators, sham assets sales revolving around the dismantling of the economic basis of the Soviet state (pushed along by the IMF, World Bank, the US, an army of carpetbagging advisors and consultants – all keen to hurry the process so the Soviet State couldn’t be recreated), a ‘democracy’ which saw a freshly created oligarchy (those with the funds to buy the assets being sold off by the Russian state in the first Yeltsin administration) and its freshly created ‘free’ media quite literally go out and buy an election (Yeltsin 1996) where everyone knew Boris was a coronary event away from the post Yeltsin era, and his family had decided to make personal hay while the sun shone, and where ordinary Russians were already showing signs of an inclination to go back to the CCCP.

Russia descended into uber chaos in that second Yeltsin administration as the price of crude collapsed to $10/bbl in 1998, and Russia was abandoned by global capital and the western world, as a profoundly corrupt coterie group of oligarchs took control of the running of the country. All the while ordinary people’s standards of living went into reverse, and criminal gangs – largely the creations of the oligarchs – went about whacking each other on the streets of Moscow. In the 18 months following the collapse of crude, while Yeltsin was a missed heartbeat away from the afterworld, Russia had three Prime Ministers trying to craft some sort of order from the chaos. Vladimir Putin was the third of those, and the moment it appeared he had some sort of ability to deal with the chaos the Oligarchs who had created and feasted on the second Yeltsin administration, slipped him into the Presidents seat (3 months before the ostensible end of Yeltsin’s term, due to health reasons) – with a deal that he wouldn’t touch the Yeltsin family and the Oligarchs which had been spawned by it – and confident they had a compliant future head of Russia in their pocket.

VV Putin is seen as a perfectly plausible (indeed good) leader by a large majority of Russians, because he has told the neo-liberal consensus to go and get stuffed.

In that first Putin term he did a deal with the oligarchs to the extent that he wouldn’t touch them or the processes they had accumulated their wealth with, provided they stayed out of politics and didn’t undermine state interests, which he made clear from the get go were about recreating order, sorting out the national economy and its finances, and recreating a national sense of respect for themselves on the part of ordinary Russians. When some Oligarchs showed signs of baulking at that he broke them (Berezovsky and Khodorkovsky).

The rest, as they say (and it isn’t all Putin’s doing) is history. A national leader who had seen his nation taken to the cleaners by neo-liberal economic ideology rejected it out of hand and began reconsolidating state ownership of assets (particularly in energy). A national leader who had seen the ‘free’ media used to buy an election by a group of uber wealthy beneficiaries of corruption, brought the media under state control and took steps to ensure those oligarchs didn’t buy any more elections. A national leader who had seen the scant regard with which the IMF and World Bank (in particular) treated debtor nations, went out of his way to make sure Russia paid down every last cents of state debt miles before it was due, and wasn’t backward in pointing out the neo-liberal agenda and its downsides. For a Russian public which had seen politicians, policeman, gangsters, judges, journalists, and business identities blowing each other up on the streets of Moscow for ten years he bought back a sense that the risk was being reduced – and if the policing is a bit heavy it is nothing Russia hasn’t experienced before. For that same public, which had developed extreme reservations about the oligarchs and their propensity for using the state to further their own wealth he returned a sense of the oligarchs were at least now bowing to state imperatives. For a nation which had come to sense that NATO, the EU and the US, were trying to ensure a position of being able to shoot into Russia without the Russians being able to shoot back, and were forever trying to move military assets closer to Russia, Putin called out what they were thinking and told the Western world (and the neo-liberal [or neocon – there was nothing to distinguish them in a geopolitical sense] consensus) where to get off, and set about bolstering his military ability to be able to back that up.

But, as far as the Russian public was concerned, the most notable advent of Putin was that for a nation which had seen their standard of living going backwards since 1991, all of a sudden from the early 2000s onward, as crude prices rose, the government started spending on infrastructure, jobs, and services, and their lives got significantly materially better.  And yet some wondered how he became popular!

Sure, you could argue that their lives could have became even better still had their been someone else been in the Kremlin, and that Putin and those close to him were creaming the proceeds of the greatest oil gusher in history themselves, in just the same way as those oligarchs that he had brought to heel.  But even then you would have to acknowledge that a lot of people’s living conditions improved while he was in his first two terms as President.  Then as the GFC descended on the global economy, Putin bailed out heavily indebted oligarchs with state funds, but got on the phone to them to ensure job losses were kept to a minimum.  That isnt to say things weren’t tough in the post GFC years in Russia, but just that for many Russians, there was a sense that things could have been worse if Putin wasnt on the scene (remembering he was Prime Minister from 2008-2012).  And even as the crude collapse of 2014 brought economic growth to its nadir, Putin has spent big on ensuring large public works are in play (which, yes, select oligarchs get to cream state funds from) and that Russia’s Oligarchs contributed to large public works too (Sochi Olympics and 2018 World Cup).

 

Nobody knows what VV Putin is worth, but nobody doubts the answer is ‘a lot’

That isn’t to say the guy, and Russia, don’t have significant downsides. It is, as the Americans have identified, a ‘vast kleptocracy’ and there is not the slightest doubt in the world that Putin and those close to him are prime beneficiaries of that. He himself probably is amongst the richest people in the world, though we do have a situation where disentangling what is a state asset used by him, and what is his personal asset, and what are or could be gifts for him held in fief by others, is monumentally difficult. The ordinary punters of Russia are quite poor. Russia has spectacular corruption (though still to a degree lesser than Ukraine) and the regulatory services are all too often deployed as weapons in competition between the elites, rather than for a public good. The media is state centric and although good at pointing out shortcomings in the western world, would not go within a bulls roar of really looking at key issues (corruption mainly) affecting Russians. In the geopolitical sense, Russia does push the envelope; it has taken parts of Georgia, it does back a brutal tyrant in Ramzan Kadyrov as head of Chechnya, it has taken Crimea by military means, and it does back separatists in Transdnistria and Eastern Ukraine with arms, and it does play with Ukraine politics too. More disturbingly, rightly sensing that the neo-liberals of the world wouldn’t hesitate to remove VVP if they thought they were a chance, and wanting to keep as many other ‘disreputables’ for the neo-liberal consensus in play as possible, it does back (in Assad in Syria, much of central Asia, Lukashenko in Belarus) some ugly regimes.

More pertinently, given events in the US election, Russia does direct a lot of effort to hacking, digital disruption and surveillance. Anyone with a website will be able to tell you that simply geoblocking Russia significantly reduces the risk to that website.

As far as most Russians are concerned it is beyond doubt that the Americans and the ‘West’ have been seeking to influence Russian elections for the generation since Gorbachev handed over the reins. You can see it in the NGO activities, the media coverage of things Russian, and UN and global institution activities in Russia. For most Russians, Russia having an ability to eavesdrop on the Western world, or hack into its communications, or even to be able to spread disinformation, is nothing that they don’t feel they have experienced for a generation. If they think their government has the ability to do it back then they are often supportive of that.

From there, the closest engagement of Russia and the ‘West’ has generally been at the ‘elite’ end of town where uber wealthy Russians, who all Russians assume have been beneficiaries of corruption in Russia, are welcomed into New York or London, often fleeing law enforcement in Russia, and often get rewarded with passports and visas and rights to abode and buy property which ordinary Russians would never be able to access if they were fleeing Russian law. In the end the Davos set got Khodorkovsky out, and a walk through the expensive burbs of London New York or Miami will alert to the possibility there are a lot of minor bureaucrats, minigarchs, and oligarchs who have apartments, mansions and estates there, having got their booty out of Russia. The ‘West’ rewards parasites praying on Russia, and most Russians tend to the view that the western ‘ideal’ of Russia is an enfeebled state which is militarily and economically impotent. For some Russians a bit of totalitarianism in Moscow is an acceptable alternative to having impotent chaos which rewards the criminal. If that is the dynamic the Russians are seeing then why wouldn’t they seek to influence perceptions and know about the thinking on the other side?

Mrs Andrei Borodin found some comfortable digs not far from London after Andrei did a runner from Russia with an estimated $7Bln formerly under his care as CEO of the Bank of Moscow.  If you can rip Russians off for megabucks the UK and US will be sure to look the other way when you take it to their jurisdictions.

I don’t have the slightest skerrick of doubt that Russian controlled elements sought to hack into whatever they could in their pursuit of knowledge about what was unfolding in the US. Similarly, I don’t have the slightest doubt that Russian media presence presented issues in the US and UK media to influence the way those publics saw events, so as to be able to further Russian state interests. The question is not about whether they would try.  The question is about how they may have succeeded – or if they have.

The question about whether they have succeeded in hacking would be answered only in knowing the security of the US officials whom the Russians are believed to have hacked – but like most security the weak link is the people, not the system. So far the evidence is slim, though for publics around the world it usually is slim when it comes to issues of espionage and state involvement.  If that hacking turned up something which could be deployed to benefit Russia’s view of the world does anyone seriously think the Russians would hesitate?  Is that the way the espionage world works anywhere?

The question about whether Russian state media was an influence in determining voting priorities of publics in the US and UK would reflect not so much the Russian media, but the degree to which the media in those nations had ceased to be credible to those living there – and it is fairly obvious they have cashed in their credibility with the publics they service, amidst a raft of issues which couldn’t ever really get traction – such as taxes of the elites, corporate tax avoidance activities, the increased take of the economic pie by the 1% set, immigration control, the offshoring of working class jobs, lack of wage gains for the 99% and private debt. Like, if the Russians had wanted a perfect environment into which they could pump fake news and have it believed, it isn’t as though we haven’t gone out of our way to give it to them.  If they have created outfits like RT and Sputnik to sir up issues which the western media no longer touches, but which they know are sensitive for sections of western societies, isn’t the problem us and how we communicate our issues, and the limitations of that, rather than them who are getting traction with their coverage? (to the extent that they are?). Much of the hand wringing about Russia’s activities in the wake of Brexit and the 2016 US Presidential election is either unbacked by much clear data or shy on acknowledging our own media, its ownership and management, and its role in contributing to the situation – which is for sure far larger than anything the Russian have done.

So where do we go from here with Russia? God only knows. I can’t see crude prices going anywhere significantly above where they are, and energy is the only real lever Russia has – both as a direct tool in its geopolitics, and in the funding of the Russian state (and military) it enables. So I tend to see the high water mark of Putin’s influence as probably having just passed. We can be fairly sure that next time around there will be strenuous and well-funded efforts to ensure that any Russian influence in the media sufficient to influence electoral dynamics across western Europe or the US will be curtailed. I don’t doubt VVP will win the 2018 Russian Presidential election easily. But after that it wouldn’t surprise me to see another more concerted effort to undermine Russia (possibly with exactly the same tactics that Russia has deployed – it isn’t as though the Russian public doesn’t have issues which the Russian media doesn’t address, and it isn’t as though Russian political figures don’t have a range of issues which they would rather were kept hidden which could be exposed), and or seek to establish something in the post Putin era which was more inclined to come to agreement with the neo-liberal interest. I cannot see ordinary Russians getting increased access to visas and passports in the EU, UK or US, and I don’t really see Russia addressing corruption any more than it has, and I don’t see living standards in Russia getting significantly worse, but rather trudging along the bottom where they have been since circa 2012.

I reckon there is great scope for some form of Russian overreach, but also for a miscalculation on either the western or Russian side to disrupt things. I reckon Trump and Putin will have conceptual similarities in common which are recognisable to each other – both are scions of revolt against a neo-liberal consensus which had been feeding ordinary people bullshido, but both are also essentially frauds insofar as both are beneficiaries of that consensus (Trump as property developer before becoming President, and VVP after becoming head of state, with his creation of his own team of Oligarchs and the wealth accrual processes of every key figure in his administration) – but I don’t think they will be able to do all that much for each other. I don’t see that much scope for more trade between the US and Russia, and I see little likelihood of the financial sanctions on key Russians being removed (and even less of the media awareness of the implication of that becoming a political football in the US). More importantly I can’t see Trump being able to deliver higher crude prices which would loosen the economic straightjacket on Putin. Putin may be able to come to some sort of ‘spheres of influence’ deal with a Trump administration which would free up US military assets to focus elsewhere, and possibly to sort out a batch of ‘frozen’ conflicts Russia is involved with.  I can see the current Ukraine administration withering on the vine as the EU and US walk away from any engagement with it – which would free up Russian funds supporting separatists there. That said if things got out of hand I could see Russia laying claim to Novo Rossiya, though I think an increased autonomy deal with those areas remaining inside Ukraine is more likely.

All in all, an entertaining time ahead

A man who hasnt paid tax in 20 years but has become President of the United States on the back of concerns about elites avoiding tax and taking over the running of the country, may have some interesting observations on a man who has made himself immensely wealthy as President of Russia after becoming popular as leader for addressing oligarchs who use the national media and democracy as an elite plaything.