Thursday, 8 May 2014

Democracy Blues in Ukraine

It's a funny thing; this business of democracy.

These days in Ukraine, everybody claims to be democratic. Everybody claims to represent the people. The acting government in Kiev can point to the fact that 77% of people in Ukraine have told pollsters from Pew Research that they want the borders of Ukraine to remain unchanged. Pro-Russian secessionists can point to the fact that 54% of Crimeans want regions to be able to secede from Ukraine; and that - in eastern Ukraine - the 27% of Russian-speakers who feel the same cannot simply be ignored. ( Pro-Russian secessionists can, of course, also point to the fact that Pew Research is based in Washington, DC (although, by that standard, what are we to think about Russia Today...)

...and a vast majority of people in Ukraine can point to the fact that they would like peace now, please, and could all those nice pollsters please go away.

Anyway, so much for the hoi polloi. All the statespeople want to be democratic, too, yes they do. That is why Petro Poroshenko and the West want that Ukrainian presidential election to take place on May 25 across the country - apart from in the nasty terrorist towns, of course ( And that is why Vladimir Putin was for the east Ukrainian secessionist referendum - until he was against it, of course. ( How fortunate for democracy that eastern Ukraine, as represented by those most illustriously non-elected militias, have decided to ignore Uncle Volodya and press ahead with their voting, nonetheless. (

Why is it, by the way, that Maria Lipman, Vladimir Solovyov and so many others seem to think Putin planned this snub of him from the start? ( OK - I get why Solovyov thinks so; as a Putinista he would have to do so. But hasn't it occurred to anybody that Putin has been a politician for a good fourteen years now. As all other politicians in the world, Putin has long since learned to make mistakes - and now he just looks like someone who can't control his troops.

Anyway, I digress from my digressions. Democracy, it's about DEMOCRACY (the word around which all statespeople of the world must unite!)!!! Democracy - C'est la lutte finale / Groupons-nous et demain...

Look, I get it that democracy is a lovely thing in many ways; least evil and all that... ( I'm all for the power of the demos. But can we please all start agreeing on a simple starting point:

Democracy is based on fiction!

This doesn't mean we should get rid of democracy, far from it. And it doesn't mean there is not qualitative difference between the lumpy porridge served in much of the West and the rancid meat of the Russian political system - because, my God, there is such a difference! ( But it does mean that all this search after a "truly democratic" election that will "save" Ukraine, or "save" Russians in Ukraine, is futile.

If the referendum on secession in (parts of) eastern Ukraine takes place this Sunday it will in itself provide no legitimacy to a region uncontrollable from Kiev (and from Moscow?). Just as the referendum, so-called, in Crimea provided no legitimacy, either, carried out as it was under the barrels of automatic weapons. And without legitimacy, on Crimea and in the rest of Ukraine, the status of the peninsula will remain uncertain. Similarly in eastern Ukraine - how can people vote in a free and fair manner with all sorts of armed bugbears running around? (and yes, there are bugbears on both sides of the divide).

Now as for that Ukrainian presidential election of May 25... William Hague, who has otherwise been sensible recently, states that the failure to hold this election would be very serious, because "Once postponed, who knows when they would be held." ( Very true - and once held, who knows when the new president will be accepted throughout Ukraine? Of course Poroshenko wants this election to take place - he's bloody in the lead! (outside Slavyansk, anyway) (

Neither the referendum, nor the presidential election will solve anything as such. Certainly, neither shall the "will of the people(s)." What will work? Well, to start with - there must be an agreed demos, a people on which all the goodies of democracy can centre (how the deuce do we do this? Well, might a "Truth and Reconciliation" committe be an idea - possibly supported by a Ukrainian government in which each minister represented a region in Ukraine?). That demos must be everyone resident within and holding the citizenship of Ukraine; a citizenship which should be straightforward to get. Yes - the demos includes people from Western Ukraine ("fascists" and all). It includes Crimeans. And yes - it includes, too, Mr Poroshenko's "terrorists" in Slavyansk. We can punish by law all wrongdoers, for sure, but until we know who "we" are, we can't do a thing - at least that must be the reality for everyone in Ukraine.

Yet, if we agree that crimes have been committed by those on both sides of the fighting in Ukraine (and I certainly agree - as much as I sympathise with the Ukrainian position, I watched the live, savage beating of a pro-Russian militaman in Odessa and almost vomited...) then why are the borders of Ukraine such a non-negotiable? Why can't regions of Ukraine become independent or join Russia if their populations so wish?

Well, because democracy and its purported legitimacy may be fictitious - but they are based in a more fundamental fiction, and that is called sovereignty and the international stability that this confers. If Crimea can secede based on the fact that a majority of Crimeans want to secede (assuming this referendum had been free and fair, which it most certainly wasn't) then why couldn't Chechnya become independent (Dzhokhar Dudayev arguably had a republican, if not nation-wide, majority for that)? Why can't the Basque Country and Catalonia become independent? And why does Kharkiv necessarily have to follow Slavyansk into Russia? What is "eastern Ukraine" anyway?

...oh, that's right, "eastern Ukraine" is a fiction, just like "western Ukraine," just like "Ukraine." But "Ukraine" is a fiction with twenty-two years history, at least, and that beats twenty-two days. History, in its crooked way, can slowly confer some sort of legitimacy and normality - that normality back to which all people in Ukraine must now seek. For their sake, for the sake of the Russian Federation (with its own twenty-two years of history), for the sake of us all.

Tuesday, 6 May 2014

Why the Russian economy matters

In Ukraine, fighting spread from the east to Odessa. Each day witnesses new battles and deaths, most recently in southern Mariupol although the now familiar battleground of Slavyansk continues to burn. Now, in a callow (or callous?) move, pro-Russian militias let civilians man the barricades in the east. Certainly, this may slow down the advance of Ukrainian troops, but it does nothing to protect ordinary people, Russians or Ukrainians, of eastern Ukraine. The nationwide elections of May 25th do seem hopeless, now, but so does the referendum planned in eastern Ukraine for May 11th. Russian troops may yet officially invade Ukraine.

On this dark background it seems perhaps misguided to focus, for a moment, on the state of the Russian economy. Yet we cannot avoid looking at this economy if we are to properly guess at the longer-term involvement of the Russian state in Ukraine - and in Russia itself.

Three questions are particularly pertinent.
  • Is the economy of Russia in trouble?
  • Is the state of the economy of Russia connected to Western sanctions?
  • Do Russian elites care about the state of the Russian economy? 

On the first question: Yes, the economy of Russia is in trouble, in the short term but, much more importantly, over the medium to long term, too. In Q1 for 2014, Russian GDP contracted by 0.5% according to the Russian Ministry for the Economy, which also states that growth may not exceed 0.5% for the year. Now, Maksim Oreshkin of the Russian Ministry of Finance has confirmed that Russian GDP is set to contract again in Q2, meaning that Russia is technically in a recession.

This is not, or not primarily, due to Western sanctions, however. Russian economic growth has been sluggish for a while. Last year, for instance, the IMF measured Russian GDP as 1.3%. Admittedly, this growth has now been downgraded to a projected 0.2% (the OECD project a 0.5% growth rate for 2014), but even if growth for 2014 were to equal that of 2013, it would hardly be impressive. Remember, this is a BRIC we are talking about - one of the four great developing economies (together with Brazil, India, and China - and South Africa for BRICS) immortalised for a decade by Jim O'Neill of Goldman Sachs. You cannot really blame O'Neill for the comparison; it made fine sense in 2001 and the years thereafter.

But now... In 2013, admittedly, according to the IMF Russia remained the eighth-largest economy of the world, with China second, Brazil seventh, India ninth (and South Africa thirty-third...). The Russian economy still matters - but look at growth rates. According to the IMF DataMapper for April 2014 (which even has Russian growth rates at 2.5%), India is at 6.8%, China is at 6.5%, and even Brazil has a projected year-on-year growth of 3.5%. ( Also, tellingly, with the exception of Ukraine (for which no secure data can be obtained presently by the IMF), all other post-Soviet states have a higher economic growth than Russia. For sure, the Russian economy is so much larger than that of its neighbours that its relative sluggishness still conceals assets much larger than those of the neighbouring states. Yet, clearly, the Russian regime is in no position to promote their state as the powerhouse that shall drag surrounding states into a glorious economic future. So much for that Customs Union, perhaps? Much more importantly, so much for Russian aspirations to show their country as an economic powerhouse of the world.

Western sanctions against Russia do have an impact; as does the uncertainty fostered among Russian and international investors by the persistent unrest next to, and partly fomented by, Russia. Apart from sharply curtailed GDP growth, inflation in Russia is rising with the Central Bank recently rasing the base rate by 50 basis points to 7.5%. Yet if this was the Russian economy of the early noughties it could probably ride out the storm. Now, sanctions may not force the Russian regime to be constructive in Ukraine. Russian elites do (mostly) care about the state of their country and its economy, but the fight for Ukraine and the incendiary anger against the West is taking precedence. So far, so understandable.

But what comes next? As mentioned above, Russia can no longer show itself internationally as a quickly growing economy. For better or for worse, the Russian economy has "matured" - and this thanks mainly to great world market oil prices over the last decade. And how has Russia and Russians benefitted from this? Especially outside Moscow and St Petersburg? Not very much, it seems. For 2013, the Economist Intelligence Unit compared living standards in 80 countries (that is, "where is it best to be born?"). Russia was not last. Oh no, only number 72 - and it beat Syria! (while losing to Indonesia, but there we are...). ( Surveys of political and civil freedoms, and on corruption levels, do not make for more cheerful reading for Russia.

Maybe these measurements are misguided, run by Western, subversive agencies? Well, if so - why, in June 2013, did almost half of all Russian students dream of emigrating? Why did 38% of businesspeople want to leave. This according to Russian pollsters, from the respected Levada Centre. (

The real problem is not that the Russian economy is getting sluggish. The real problem is that Russians (and everyone else) are ever less convinced in the Russian economy, and in the ability of their regime to better ordinary people's living standards. Russians and Westerners alike know of the American Dream; it stayed alive and well even when the American economy was in the doldrums. There must be a Russian Dream, too. It should be brave and optimistic. Instead, it seems just unrest and death. And that, it seems, is all that President Vladimir Putin and his staff is able to leave behind.