Si prestas tu martillo, te prestaré mi hacha

On this latest episode of Departures, Robert Amsterdam speaks with an admired friend and colleague Dr. Anders Åslund, author of the new book, Russia’s Crony Capitalism: The Path from Market Economy to Kleptocracy.

In his book, Åslund contends that in his eighteen years in Moscow, Putin has succeeded in establishing a Russian state and economy that are “exceedingly reminiscent” of those that existed in tsarist Russia, a far cry from the democratic state and liberal market economy that global observers had anticipated would inevitably follow the collapse of the Soviet Union.

According to Åslund, Putin has accomplished this by constructing an “iron quadrangle” comprised of “four circles of power,” which are “vertical state power,” “big state enterprises,” Putin’s “cronies,” and “Anglo-American offshore havens,” respectively.

The consolidation of this iron quadrangle is the result of Putin’s years’ long effort to deinstitutionalize the Russian state, and devise a system that guarantees macroeconomic stability, but falls short of delivering economic growth. As Åslund describes, these circumstances will likely yield a Russia in regression, a nation that is increasingly patrimonial and, as a result, will accelerate the ongoing retreat of democracy. Should this continue unabated, global powers, particularly those in the West, may expect Putin to grow increasingly authoritarian, and in the tsarist tradition, grow evermore inclined to taking risks in seeking sources of legitimacy other than macroeconomic stability.

Source: robertamsterdam.com

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South Korean jets fired warning shots at a Russian military plane. South Korea’s defence ministry said two Russian bombers and a surveillance plane, plus two Chinese bombers, had violated its airspace (above barren islands also claimed by Japan). Reports from inside the Korean government said the Russians acknowledged the incursion and blamed it on malfunctioning equipment.
–The Economist Espresso, 24 July 2019

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What is Vladimir Putin goal [sic] for Russia and the Russian people?
Dima Vorobiev, Former Soviet propaganda executive
Answered Jul 18

Russian Federation is run as a highly profitable commercial project of about 100,000 families, with President Putin and a circle of a few influential state-oligarchical clans at the top.

They have been very successful and ensured two decades of stable and relatively wealthy existence for the broad masses of our population.

Vladimir Putin’s goal for Russia and the Russian people is to perpetuate this project for as long as possible.

Below, a resident of St. Petersburg, hugely impressed by many successes of President Putin, uses his portrait for personal protection in his daily affairs against bad luck, evil spirits, and corrupt government servants.

putinist

Source: Quora

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Giuseppe Conte, Italy’s prime minister, does not belong to either of the parties in his populist coalition government. But today the former law professor will report to parliament on the allegedly grave misdemeanor of one. Prosecutors are investigating allegations that the hard-right Northern League negotiated with Russian intermediaries for funding worth tens of millions of euros. The League’s leader, Matteo Salvini, who was not at the meeting in Moscow and denies receiving money, at first refused to make a statement to parliament, but now says he will give his version of events. It might be thought the claims should be particularly damaging since they are backed by a purported recording of the discussions. But they seem to have done Mr. Salvini no harm. A poll at the weekend showed backing for the League had risen nearly three points, to 35.9%, since before the recording was made public. For now, Mr. Salvini seems bulletproof.
–The Economist Espresso, 24 July 2019

Plato Is Invincible, or, The Fix Is In for RTITS

Russian Government Could Pay for Protests Against Plato Road Tolls System
Olga Adamchuk
Vedomosti
January 8, 2019

“No to Rotenberg’s extortion” read stickers on long-haul trucks in early 2017, when highways were blocked [sic] in protest against the introduction of the Plato road tolls system. An agreement that would establish an automated weight-and-size monitoring system on federal highways, fining overweight trucks, would protect its likely operator, RT Invest Transport Systems (RTITS) from problems associated with such manifestations of dissent.

Currently, RTITS is 23.5% owned by Igor Rotenberg [son of Putin crony Arkady Rotenberg], 50% by RT Invest, 19% by Andrei Shipelov, and 7.5% by Anton Zamkov.

If there are rallies, demonstrations, meetings, and marches near the automated weight-and-size monitoring points, even if these events were authorized, and they hindered the construction or operation of the Plato system, incurring extra costs to the operator, the Russian government would be obliged to compensate the operator for these expenses, according to a draft concessionary agreement, published December 28 on the official Russian government bidding information website torgi.gov.ru. The operator would be able to bill the government not only for actually incurred losses but also for expected losses.

The government will wait for other bids until February 12. If other bids are submitted, there will be a tender for the contract. If there are no bids, the agreement will be signed on the current terms.

However, downtime in the operation of the scales will have no effect on the operator’s revenues, which will be supplied not by Russian truckers, but by the Russian government. For installing and maintaining the system, the operator will be paid 8.64 billion rubles annually [approx. $129 million] (VAT not included) over eleven and a half years. The government will shell out a total of 118.45 billion rubles [approx. $1.7 billion] (VAT included) to the system’s operator. The concessionaire would pay fines for the glitches for which it was responsible. An appendix to the agreement stipulates the system must identify three quarters of violators.

The agreement features a long list of special circumstances in which the operator can demand additional payments from the government, including when inflation is twice as high as was expected, and if the project goes over budget by ten percent or more.

The government would also permit the system’s operator to use the property it builds and installs, which remains state property, for any purpose, including commercial ends.

A concession deals insider notes this stipulation has usually not been part of projects in which the grantor made payments to the concessionaire, since, if there were an opportunity to earn money, it should reduce the fee paid by the grantor. The agreement also lacks the routine stipulation that key subcontractors must be approved by the grantor. Our source wondered why the government was thus willing to forfeit oversight of the project. If the concessionaire had managed to obtain cheap financing, the government could reduce its fee: the state and investors would usually share benefits equally, but there is nothing of the sort in the proposed agreement.

Currently, there are 28 weight-and-size monitoring points operating on Russian federal highways. After the new system has been completely installed, in 2024, there will be 387 automated weigh stations. Under the terms of the project application, eighty-eight of these weigh stations will be built by way of improving the current Plato road toll system, the Russian Transport Ministry has reported.

Investors are also protected in case the agreement is terminated. The Russian government shoulders a greater payout to the concessionaire than it would in similar agreements, said Sergei Luzan, director of PricewaterhouseCoopers Russia (PwC Russia). Even if the project never gets off the ground, the concessionaire can incur two billion rubles in expenses and have them repaid by the Russian government. Such conditions are possible in concessions, but the government usually only pays costs that have been itemized and authorized in advance, and at a discounted rate, Luzan said.

In 2017, protesters demanded the government terminate the concession agreement for the Plato road toll payment system. Andrei Bazhutin, [chair of the Association of Russian Carriers or OPR], said truckers were planning to protest the launch of the weight-and-size monitoring system as early as February. According to Bazhutin, Russia’s independent truckers had been engaged in serious discussions.

Alexander Kotov, chair of the Truck Drivers Trade Union, also confirmed discussions were underway, but he refused to say when protests could begin. He said carriers would like to see shippers bear the cost for overloaded vehicles.

Having to pay for an overloaded vehicle that travels through several weigh stations could simply ruin a small trucking company, but it would also go bust if it refused to dispatch the overweight vehicle, explained the head of a major logistics company, because the shipper would hire another carrier.

As cited by the Transport Ministry, the RADOR Association (a national organization of local road authorities) has claimed that overloaded trucks cause 2.6 trillion rubles in damage to highways annually. According to statistics, there are no longer any problems with federal highways, since they are in between scheduled overhauls. But the president has ordered an overhaul of regional roads, which are still in a state of chaos.

The truckers and spokespeople of truckers associations surveyed by Vedomosti were unhappy with the current weigh stations. Bazhutin said that, compared with the Plato system, the weight-and-size monitoring system still had numerous shortcomings, for example, the fact that weather conditions had a huge impact on the accuracy of scales. He also noted that drivers do not see whether they are running overweight when they drive over the scales, and so when they receive a fine of between 100,000 rubles and 500,000 rubles [$1,500 to $7,500] in the mail, it is a complete surprise to them. If a trucker fails to pay the fine, his or her account is blocked.

“It’s just like with Plato. It doesn’t matter whether you were running empty or loaded. You have to pay whether you were overweight or not, since the system registered a violation. It’s impossible to dispute a fine. Since this whole business puts pressure on self-employed carriers, there will likely be protest rallies and marches,” said Bazhutin. “But we’re unlikely to set up a protest camp next to a weight station in Yaroslavl Region, say, when it is the federal authorities who are making the decision.”

Kotov argued that, since the bulk of cargo in Russia is shipped by trucks, this new financial burden would ultimately be passed on to consumers.

Political scientist Abbas Gallyamov argued the state of public opinion is currently such that things could kick off anywhere whatsoever. Any action by the authorities that is deemed unjust is capable of setting off a wave of protests. Gallyamov notes that Russian truckers have demonstrated their willingness to fight back and their capacity for coordination; moreover, they did so in circumstances in which public opinion was generally much more inclined to side with the regime. Given this past history, the chances of Russian truckers rising in protest again were great, he concluded.

Spokespeople for the Transport Ministry and RTITS told that the terms of the agreement were standard.

Translated by the Russian Reader. Photo courtesy of dangerousroads

Between the Ages of 17 and 25

Since Putin couldn’t smash Aleppo with his pal Bashar Assad, he is now going to provoke all-out war with Ukraine. Or he is going to play at provoking all-out war. Either way, he is going to have some fun.

In 1939, the Finns likewise “provoked” Stalin into invading Finland. Meaning that Stalin pretended to be provoked, and then went in guns blazing, getting three hundred thousand Soviet soldiers killed or wounded in the process.

There are oodles of serious problems with the Russian economy, which Putin shows no interest in solving, because really solving them would involve the self-liquidation of the current elites. Although pumping up defense spending and, hence, the military-industrial complex, which is what he has been doing in the past few years, has been a temporary patch on some of those problems, of course.

It is funny and sad that Russians themselves don’t get tired of this merry-go-round, but they seem to be sinking ever deeper into various species of emigration, internal or actual, or what they themselves call a “second childhood.”

It is even funnier that Jill Stein, presidential candidate of the US Green Party, could believe she was doing the work of peace or “anti-imperialism” or whatever she thought she was doing when she dined with Putin in Moscow or that she could imagine the “crisis” in Crimea and Eastern Ukraine was caused by anything other than domestic Russian politics or, rather, the snowballing contradictions spinning off the tiny, eccentric orbit inhabited by the country’s president-for-life in all but name and his retinue of oligarchs and FSB veterans.

Anyone who thinks the Kremlin’s policies are a rational or predictable response to the “international situation” or the bad deal Russia allegedly got when the Soviet Union broke up is a complete fool or a bought-and-paid useful idiot. You can be traumatized by the “bad things” your parents did to you (unless they really were bad things) for only so long.

When, however, you have reached the ripe enough age of twenty-five, as the new Russia has this year, it is time to stop telling stories about your bad upbringing or how you grew up on the wrong side of the tracks.

In other words, this is all about the dead end Putin and his pals from the FSB and the Ozero Dacha Co-op drove the country into when they decided they would run Russia like Tony Soprano and his crew ran whatever they were pretending to be running in the fictional TV New Jersey.

Putin has flagrantly and criminally misruled Russia for seventeen years as of August 9. That is one year less than Brezhnev reigned as General Secretary of the Soviet Communist Party. But Putin, to all appearances, is fit as a cello, unlike Brezhnev was in 1981, the year before he died.

Ugh. Happy new year.

Thanks to Comrade MT for the felicitous line about the cello. Photo by the Russian Reader