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Tuesday, February 20, 2018

The fateful August: new surprises for Russia


Coming to the end of August, the month for most countries is quite “sleepy”, but Russia is one of the richest in events. If not always unpleasant, it is often significantly changing the direction of the country. Today, considering the rapid growth of contradictions between Moscow and the world, the exhaustion of financial reserves while still not rising to the desired country of oil levels, endless conflict in Ukraine and the difficult relationship between the centre and the regions, whether there is desire or not, there in memory of the former event formed the image of the future — and nothing like what looking for in government sectors. Though not in chronological order, but try to remember some of the August events.


photo: AP
August 1991

The first memory now comes 1998, August 17. On this day, Russia declared a default on government domestic debt, which at that time reached 570 billion rubles, which accounted for 21% of GDP. The reason is well known — the price of oil fell to nearly $10 per barrel, significant budget expenses, huge interest rates that you were required to pay for debt servicing. The result was the stock market crash and the long absence of Russia in the world economy; output of the then crisis would not have happened without the growth in oil prices by almost 13 times over ten years.

Today Russia is quite capable to deal with a similar problem, but for political reasons. Recently (also in August) approved by the President of the United States new sanctions package is, if necessary, overlap almost all credit limits on the Russian Federation itself and quasi-public borrowers (state corporations and the largest banks).

Today, their debt to foreign financial institutions is $465 billion, and if the sanctions war is about to go into the open phase, the fall of the ruble will make servicing that debt companies non-oil sector is impossible. Central Bank reserves (even without Reserve Fund), which now amount to $412 billion, not enough to razrulivaniya situation. The financial tsunami can be extremely destructive, despite all the arguments about “island of stability” which the stormy wave had almost washed away in 2008-2009. A full-scale economic disaster is inevitable and at lower oil prices below $30/ barrel (it is worth Recalling that lower values correspond to the 1998 price of $20.5 in current prices adjusted for inflation). The previous crisis was largely due to the fact that Russia was a “gas station”; however, since the share of oil and gas in our exports has not decreased, so that bright hope to feed you should not.

The second important date — in 2008, 8 August. Russia introduces troops into Georgian territory in response to armed provocation of the Georgian authorities in Tskhinvali. This event, which was the beginning of the mythical “five-day war” is just such, which required the country to demonstrate his “getting up off its knees” — in Moscow formed a sense of permissiveness in their actions in the post-Soviet space. In many ways he contributed to the first steps of the Western powers who rushed to search for the “peaceful solution” and in the end almost completely its own powerlessness, since most of the clauses of the agreement the “Medvedev–Sarkozy” on the part of Russia was not fulfilled. However, Western countries not only did not go to confrontation with Russia, but soon declared a policy of “reset”. Accordingly, it was difficult to imagine that Moscow will be in future more circumspect in relations with neighbours, and six years later we saw the full support of separatism in the Eastern regions of Ukraine. The response of the West at this time became originally introduced against the Russian Federation sanctions, but in General, the confrontation is increasingly fraught with serious military and political aggravation: there’s a reason the Pentagon recently urged the White house to approve deliveries to Ukraine modern anti-tank weapons.

In August 2008, was a prelude to the Crimea and Donbass, and they, if Russia will not change its dismissive attitude in the international law of course, can themselves be the prelude, God forbid, to only to the new cold war. Meanwhile, despite the stories of our rapid rearmament of the Russian army remains weaker than the NATO forces, with which we are almost ready to fight. Think about the scenarios of a possible confrontation didn’t even want.

Third date, now almost forgotten, 1996, August 31. In Khasavyurt signed the famous agreement between the Russian Federation and the Chechen Republic of Ichkeria, almost bringing the Chechnya of the Russian legal field, but finishing the first Chechen war. Then, we now know, will be the second Chechen war, which de jure restore Russian sovereignty over the Republic, but which will create a situation much more explosive than the agreement twenty years ago. Today Chechnya is the same as not being in the Russian legal field of the subject; it is de facto collects a tribute from Russia — both via the budget channels (Republican budget for 2017 suggests content from its own sources by 18%, whereas 82% are Federal grants), and informally, through business networks and Diaspora, but at the same time in this area, obviously, not Russian laws, is not controlled by the customs and state border, are not functioning of the Russian power structures. Personal armed forces of Ramzan Kadyrov, according to some, account for up to 20 thousand people (see: Yashin, Ilya. The threat to national security. — Moscow, 2016, SS. 27-29, on the website: https://openrussia.org/post/view/12965/), and they are armed much better than the 15-25 thousand fighters who resisted the Russian army in the end of 1994. The Khasavyurt agreement, which largely became the occasion for a strong Imperial Renaissance “loser” first Chechen war Russia, the Kremlin brought to a standstill in the North Caucasus problem: I have no doubt that the change of the political regime in the country and return it to any type of normality will require a third war in Chechnya, which will be triggered either by the desire of Moscow to establish in the region basic order or the growth of extremism in Grozny, the loyalty which is now simply bought at the exorbitant price and which is unlikely to want to abandon constantly paid to Russia indemnities. Whatever, in this case the prospect, she does not look optimistic.

And finally, the fourth date 1991, August 19. On this day, Soviet President Mikhail Gorbachev was removed from power, which put Russia on the brink of civil war and made the subsequent collapse of the Soviet Union irreversible. It is possible to evaluate the role of the participants of those events, but it is impossible to doubt that they were caused by the critical delay of necessary reforms and brutal struggle within the Soviet nomenclature, parts of which have different react to the unfolding crisis. Today to the outside observer, the situation is diametrically opposite: there is complete unity of the power elite and the broad support of the President by the population. However, in my opinion, should not be discounted nor the fact that the last three years the standard of living of Russians is reduced, and, in the opinion of the authorities, this trend will not radically reversed over the next ten years, if not longer; nor the fact that a growing confrontation with the West here-that would endanger the assets and interests of senior officials located outside the country.

As you know, the recently adopted package of sanctions the state Department, the Ministry of Finance and the CIA’s responsibility to examine the condition of assets, foreign businesses, sources of income and involvement in corruption transactions, as well as relations with Vladimir Putin and other members of the Russian ruling elite all the richest Russians and individuals significantly influencing the country’s foreign policy in order to prevent the authorities of any state to hide the financial activities of members of the Russian government and representatives of the inner circle of Vladimir Putin, who became rich by means of corruption and to present the first report on the subject within 180 days. The latter requirement means that the first report should be submitted a month before the upcoming presidential elections in Russia, and he, in my opinion, will be for the ruling elite no less a challenge than anticipated signing of a new Union Treaty for the Soviet nomenklatura. In fact, the questioning of all “financial achievements” Patriotic “politicians” over the years, and it is difficult to say will not undermine whether the August decision of the us congressmen, the unity of the Russian elite as well as reforms of Mikhail Gorbachev did with Soviet in August 1991.

Of course, any comparisons and Parallels are conditional, and no “August mysticism” does not exist. Today, however, it becomes increasingly difficult to get rid of the anxious feeling many deja vu, which are sometimes committed unexpected perspective. The way of the future, formed by considering those problems that are deeply engraved in the Russian economy, Russian society and Russian politics, is drawn not rainbow, but rather extremely vague. To change it, must not abstract the program, which will be forgotten after the next elections, a system understanding its own recent history and a rigorous comparison of the challenges faced by the country on 30, 20 and 10 years ago, with those that are formed rapidly before our eyes. Otherwise, dreams about the future threaten to turn into a very unpleasant awakening…

Sanctions . Chronicle of events
source

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