Following the recent destruction of a satellite by a Chinese missile, I was slightly shocked to read the comment from Russian defence minister Sergei Ivanov (as reported by the Moscow News) about the incident: "I have heard reports to that effect, and they are quite abstract. I’m afraid they don’t have such an anti-satellite basis. The rumors are highly exaggerated.” The last comment sounds a bit like Mark Twain's "reports of my death are greatly exaggerated." Either they destroyed a satellite or they didn't. There might be something lost in the translation but it sounds a bit like "the Americans are lying but I am too diplomatic to say so." Surely if the Russians had not detected the event, the proper thing to say would have been perhaps, "if it is true then it's a worrying development" or even, "if it is true then it's good that our Chinese friends have the power to hit America where it hurts". Could it be that, since the Chinese had not confirmed it, he simply could not resist the temptation to call the Americans liars. In which case the recent Chinese confirmation that they did shoot a satellite down seems to have pulled the rug from under him.

Russian Defense Minister Sergei Ivanov has called the reports that a Chinese ballistic missile has hit a satellite highly exaggerated rumors, the Interfax news agency reported on Friday. “I have heard reports to that effect, and they are quite abstract. I’m afraid they don’t have such an anti-satellite basis. The rumors are highly exaggerated,” Ivanov told reporters in Moscow. On Friday, World media reported that China had shot down one of their old weather satellites with a ballistic missile. The United States voiced concern over the test. The US believes China's development and testing of such weapons is inconsistent with the spirit of cooperation that both countries aspire to in the civil space area. We and other countries have expressed our concern to the Chinese, a spokesman for the National Security Council, Gordon Johndroe has said . The Feng Yun 1C polar orbit weather satellite was hit by a medium-range, ground based ballistic missile approximately 537 miles above the Earth's surface. The missile used a kinetic impact to destroy the satellite, said Johndroe. Both the satellite and the missile was launched from the Xichang Space Center in Sichuan Province; the satellite in 1999, and the missile on the 11th. Officials in the U.S. are now concerned that debris from the test could cause problems for civilian and or military satellites. It is estimated that at least 40,000 pieces of debris are now floating around in space as the result of the test, and the pieces range anywhere from 1 centimeters and up to 4 inches. The pieces of the satellite and missile could stay in Earth's orbit for several decades. When the test happened, the U.S. stated that communication with one of its spy satellites was lost, but thus far no evidence has turned up to suggest the loss of communication was directly related to China's test. The test took place on January 11, 2007 and this is the first such test to occur in over 20 years. The U.S. last tested an anti-satellite system back on September 13, 1985.

Ouch!

Here's the Australian Open wrapup: Currently, half of the top-ten-ranked female professional tennis players in the world are Russians. All five of them entered the draw at the Aussie Open this year, and all five of them were ejected in straight sets by lower-ranked players. That's right, not one single top-ten Russian lady managed to remain in the draw until a higher-ranked player beat her, and not one managed to win a set in her ejection match. Only one of the five managed to get as far as the quarter-finals (Russian shortcomings were confirmed in the ladies' doubles tournament at the Aussie: only one Russian got as far as the quarter finals and none advanced from there).

Russia's Maria Sharapova, ranked #2 in the world, was that one, and made it not only to the quarters but to the finals. However, she only got that far because, unlike any of the other top-ten rooskies, she was lucky enough to play against another Russian in the quarter finals -- she then met the retiring Kim Clijsters in the semis, Clijster's farewell match at the Aussie. In the finals, things got even uglier for Russia, making it seem it might have been better both for Rusisa and the sport if Shamapova had lost to Clijsters rather than winning.

Shamapova was blown off the court in the finals by an American tornado named Serena Williams, ranked #81 in the world and unseeded. Out of 15 games played in the match, Sharapova was able to win only three, having her serve broken four times and striking only 12 winners to 28 for Serena. Sharapova won only 35 of 96 points played. The least possible number of points a player needs to win a two-set match is 48, and Williams needed just 13 more than that. It was one of the most humiliatingly one-sided whippings in the history of Grand Slam finals. No wonder so many Russians are so afraid of dark-skinned people!

Sharapova, who will become #1 in the world next week simply because she played the Aussie while the world's true #1, Justine Henin-Hardenne of Belgium, skipped it, was exposed as the utter fraud that she is in the most brutal way possible, on the biggest stage, in unprecedented fashion (no #1 pretender has ever been so badly destroyed by an unseeded player in a grand slam final). Both her own ranking and that of Williams were exposed as total fraud. And remember, Sharapova is Russia's "best." Not only was she revealed to be playing a completely different game from that of the true champions like Serena, but Sharapova moved to the United States when she was 9 and learned her game there. She resides in the U.S., owns real estate there, speaks flawless English, spends virtually no time in Russia and has never played for the national team. In other words, she's about as "Russian" as French fries.

So much for the so-called "dominance" of Russian women in tennis, which is nothing more than an illusion -- just like Russia being an "energy superpower." Illusions are the one thing that Russia really excells at -- especially the kind the at lead to self deception. Like the famous Emperor with his new clothes, like the Soviet Union before her, Russia is in for a rude awakening.

Still, believe it or not, La Russophobe actually has something nice to say about Maria. She didn't succeed in anything, but in several areas apart from her actual game she showed the promise of improvement. Instead of wearing her trademark outrageous, clownlike outfit, she came on on the court dressed conservatively, respectfully, even demurely, in white and pale yellow (unfortunately, she threw on a ridiculous jacket for the post-match ceremony that made her again look like a circus freak). She made a clear effort to control her absurd and annoying grunting when striking the ball, though she has not mastered it yet. And despite being totally dominated in every aspect of the game, she stayed in there swinging until it was over (though it appeared on several occasions that she wanted to burst into tears). Instead of making excuses, as she had when she was humiliated by an unknown player in her first match of the tournament and almost lost, she also made a clear effort to take her loss like an adult (though she couldn't help bringing up the weather in her her loser's speech, or mentioning that nobody had expected Serena to make the finals, almost making it seem as if Serena might have been lucky). She still has long, long strides to go before anyone would think of calling her a true sportswoman but maybe, just maybe, America is finally starting to rub off on Shamapova.

In fact, La Russophobe thinks that maybe Maria Sharapova is not to blame for the Frankenstein monster known as Shamapova. In the final humiliation for poor Maria at the Aussie, her demonic father Yuri (who swept her away to the United States, keeping her separated from her mother for more than two years), leering from the stands like a drunken maniac, was caught (once again) during the tournament trying to illegally coach her and fined $2,000. This Svengali-like loser may very well be responsible for injecting far too much Russianess into Maria, and she ought to remove him from any connection with her tennis. Apparently, he spent an hour coaching her before the match, giving her all kinds of advice about her serve that promptly then fell apart on the court.

Kommersant reports:

Russia Crosses Off Anna Politkovskaya

Murdered Russian Journalist Scratched from PACE Agenda

Yesterday turned out to be the toughest day yet for the Russian delegation at the Parliamentary Assembly of the Council of Europe (PACE), where a report entitled "Threats to the Lives and Freedom of Expression of Journalists" was read and the Russian State Duma's failure to ratify the 14th protocol of the European Convention on Human Rights was discussed. Kommersant special correspondent Nargiz Asadova has the details from Strasbourg. The Investigation is stalled.

At the Parliamentary Assembly of the Council of Europe (PACE) last Monday, urgent debate on the resolution "Threats to the Lives and Freedom of Expression of Journalists" was suggested to replace a discussion of a resolution concerning Russian-Georgian relations. The Russian delegation initially greeted the change of topic as a victory for their side. However, the question of the safety of journalists can hardly be called a more pleasant topic for Russia. The author of the resolution, English deputy Andrew Macintosh, made no secret of the fact that he had been motivated to write the report by the murder of Russian journalist Anna Politkovskaya. "PACE is deeply disturbed by the numerous attacks on and threats to the lives and freedom of speech of journalists in Europe in 2006 and January 2007. The Assembly decisively condemns the murder of Hrant Dink in Turkey and Anna Politkovskaya in Russia," said Mr. Macintosh in his opening remarks. Mr. Macintosh also thanked the Paris branch of the organization Reporters Without Borders for collecting and sending to PACE chairmen Rene van der Linden several thousand signatures demanding a fair investigation into Ms. Politkovskaya's murder.

"This is a protest by the Assembly against the murder of journalists," said French deputy Denis Barde in support of his British colleague. "The authorities that kill journalists doubt themselves and doubt democracy. These people do not want to answer for their actions. They support totalitarianism and fear. No democracy can survive without a free press." "The number of journalists killed in Russia while fulfilling their professional duties is the third highest in the world, after the conflict-ravaged countries of Iraq and Algeria," said Turkish deputy Erol Aslan.

Russian deputy Leonid Slutsky attempted to stem the tide of the discussion. "The resolution says nothing about the responsibility borne by the journalistic community for the contents of what its members publish, report on television, etc. The phrase 'following journalistic ethics" is too weak in relation to, for example, the infamous 'caricature scandal.' Europe is home to twenty million believers, and they will never allow a so-called 'free' media to mock the tenets of their religion. That is provocation, not freedom!" he said.

PACE's response to Mr. Slutsky was to adopt a 16th amendment, which read, "Aggression or threats directed by any religious group towards opinions expressed in oral or written form or as drawings can have no place in European democracy." An overwhelming majority (89 deputies) of those in attendance voted for the amendment.

However, the most unpleasant point for the Russian delegation was number 11, which read, "The Assembly calls on the State Duma and the Federation Council of Russia to carry out an independent parliamentary investigation into the 2006 murder of Anna Politkovskaya and to present the results of the investigation to the Assembly."

The Russian delegation reacted with displeasure. "We have submitted an amendment suggesting the removal of the 11th point," said Russian delegation head Konstantin Kosachev during the discussion. "A parliamentary investigation is always an expression of a lack of confidence in the investigative authorities. But we have no reason not to have confidence in them. The deputies of the State Duma are in contact with Ms. Politkovskaya's family and colleagues, and we have received no complaints from them regarding the investigation. We cannot offer professional assistance to the investigation, and political pressure is inappropriate at this point." Vera Oskina, another representative of the Russian delegation, added that the investigation into the murder of Anna Politkovskaya is under the personal supervision of Russian prosecutor general Yury Chaika.

The Russian deputies succeeded in convincing their colleagues that the 11th point should be stricken from the resolution. In its place, a point was included that stated, "National parliaments should follow the progress of criminal investigations and should acknowledge the responsibility borne by the authorities not only for a lack of an investigation but for a lack of results, as in the case of the Russian parliament in relation to the murder of Anna Politkovskaya." Once all of the amendments were taken into account, the resolution passed with 106 votes.

The Court is Delayed

The next question on the agenda for PACE concerned Russia's failure to ratify the 14th protocol of the European Convention on Human Rights, which concerns reform of the European Court of Human Rights. The discussion of the issue was an ongoing debate not aimed at adopting any resolution.

At the start of the discussion, Swiss deputy Dick Marti reminded the assembled deputies of the Strasbourg Court's significance for Europe. "Thanks to the creation of the European Court of Human Rights, 800 million European citizens have gained the option of appealing to an independent judicial entity to protect fundamental human rights. But now the Court is in jeopardy. The Court is overwhelmed with cases (more than 90,000 cases are languishing without review) and cannot review them properly," said Mr. Marti.

At the beginning of the decade, when the number of cases sent to the European Court began to multiply, it was decided to speed up the review of cases by undertaking some administrative reforms aimed at simplifying the trial procedure. The Council of Europe's legal experts included the modifications in protocol 14, which was opened for signatures over the next two and a half years. In that period, all of the countries of the Council of Europe signed it – except Russia. "The efforts that we have made to increase the productivity of the Court have been nullified by the Russian State Duma. This is a very serious situation," emphasized Mr. Marti. He reserved his strongest indignation, however, for Russia's repeated accusations that the Court's decisions are "politicized." "If some country does not subscribe to the principle of an independent court, it has no place in the Council of Europe! The head of a CE member-state cannot say that the European Court of Human Rights meddles in politics just because the Court's decisions are not to his liking. That is anathema to an independent judiciary," Mr. Marti said.

Mr. Kosachev attempted to calm his Swiss colleague: "Personally, I and all of the other members of the Russian delegation to PACE voted for the ratification of the 14th protocol in the State Duma." He also noted that the Duma's decision concerning the 14th protocol is not final and that the topic will be reviewed sometime in the future.

Finally it was decided to send a group of deputies from the PACE judiciary committee to Moscow to consult with members of the Duma's judiciary committee. "The protocol is scheduled to go into effect by June of this year – we do not have much time left. We must go to Russia and convince the Duma to ratify the protocol," said Romanian deputy Georgy Frunda

Here's what Vitaly's Contrarian has to say about the recent Kremlin moves against foreign oil companies (in short, foreign investment in Russia is doomed, and with it Russia's last best hope to become a civilized nation). Note in particular how he exposes the outrageous propaganda of Russian stock broker Eric Kraus, who will do and say anything to get the unwitting to plonk their money into Russia so he can take a cut of it by convincing them that all is bright and rosy in Russia. He's one of the lowest forms of reptilian life in the venal Russophile universe.

I can’t say I was surprised to see that Royal Dutch Shell (NYSE: RDS.A) will be “selling” 50% plus one share of the Sakhalin-2 project to Gazprom for $7.5 billion. Several months ago, the Russian government wanted to take Royal Dutch Shell to court because it was ruining the environment. I suppose when the Russian government referred to the environment, it meant the economic environment, not Mother Nature. The “environmental” issue was very simple: Product sharing agreements (PSA) signed by the Russian government with Shell were not considered advantageous to Russia — at least not anymore.

The 7.5 billion-dollar question comes to mind: Did Gazprom buy a controlling stake in the Sakhalin-2 project at a fair price? It’s hard to say. $7.5 billion is not chump change, but Shell didn’t sell a controlling stake in the project — which, by the way, insured a replenishment of its dwindling oil reserves for years to come — at its own will. You don’t have to be a genius to figure out that after “selling” (I use that term loosely because it assumes willing participants on both sides) its stake in the Sakhalin project, the environmental issues will not be issues any more.

I’ll be blunt: The Russian government manipulated its environmental/legal levers to muscle an ownership stake in the project out of Shell, possibly at a significant discount. I understand that it’s so much easier to be sympathetic to the poor children and elders that this oil money is supposed to go to, than to a multibillion dollar, impersonal, foreign (Dutch to be exact) oil company.

It sounds like a Robin Hood act, taking money from the rich and giving it to the poor. It’s certainly not the first time this has happened in Russia. In 1917, on Nov. 7 (still a widely celebrated holiday in Russia), under the leadership of Mr. Lenin, the masses took from the rich and gave to … themselves. We all know how that story ended. You cannot have government thievery be a part of the free market system and expect the market to function normally.

The original Sakhalin deal

Eric Kraus who runs a Nikitsky Fund, a mutual fund that invests in Russia, pointed (opens PDF) out a study done by Alfa Bank Research, showing that the terms of the original Sakhalin PSA signed in the 1990s were unusually advantageous for Shell and its partners. For instance, usually PSAs are signed for 20 years. The Sakhalin deal was signed for 25 years and renewable at five-year increments at Shell’s discretion, forever — a very unusual clause. There were no caps on costs, and only after Shell was firmly in the black would Russia see anything from the project. According to Kraus, these favorable PSA terms are very uncommon. Cost overruns on the project did not help the issue, but if anybody ever tried to do business in Russia, they wouldn’t be surprised; The country is infested with bribe-hungry bureaucrats who make doing business in Russia prohibitively expensive and inefficient.

From today’s $60 per-barrel oil perspective, it appears that Royal Dutch Shell got a great deal in the original PSA, at Russia’s expense. However, in the 1990s when this deal was consummated, oil prices were much, much lower, and thus the breakeven point and risk for the project was a lot higher. Also, at the time, Russia was cash-poor and desperately needed foreign investment and the exploration and development know-how. Royal Dutch Shell is one of the best in the field and was willing to commit billions of dollars. And unlike Shell selling one of its best assets to Gazprom (a public company which is 39% owned by — and managed in the interests of — the Russian government), nobody forced Russia to sign the original contract in the 1990s.

Who needs the West?

Similar to Al Capone — a mafia boss sent to jail, not for his murderous crimes but for tax evasion — Mr. Putin & Co. went after Shell for “environmental” violations. However, in this case, Shell’s crime is its profitability in the face of the Russian government’s lust for oil money and control of natural resources. I don’t know if the environmental problems were really problems or not. Every time you drill for oil or gas in the middle of a wilderness, “environmental” issues could be found. But few things in Russia get done because of the environment, and this was no exception.

This very transparent act of renegotiating the terms of the contract that was signed more than a decade ago abusing the government-controlled legal system didn’t go unnoticed by foreign companies. Interestingly, even if Gazprom paid more than a fair price for the Sakhalin-2, since Shell was forced into the deal, the market perception of the whole affair will still be negative.

This isn’t the first time the Russian government has done something that has abridged the law. Using similar tactics, Russia stole (for lack of a better word) Yukos from its shareholders in 2004, sending its largest shareholder to jail, and has been gradually consolidating (deprivatizing) oil resources under the government (Gazprom) wing.

Ironically, the Russian government doesn’t care about foreign investment. It’s swimming in cash and doesn’t feel like it needs the West (or the East — two partners in the Sakhalin-2 project were Japanese) any longer. However, despite the appearance of economic prosperity, Russia is a one-trick pony. It’s blessed with natural resources (i.e., oil, natural gas, steel, timber, etc…), and that pony has been in popular demand for the last three years. Take the high commodity prices away, and Russia is back in the post-Cold War Stone Age: poor infrastructure, marginal rule of law (which is even more apparent now), and corrupt local governments.

So will this commodity-pony be in demand forever? Who knows? Predicting commodity prices is very difficult. But may Russia’s soul rest in peace if commodity prices take a dip.

Considering the recent deprivatization trends of the energy industry in Russia, oil and natural gas production is likely to face a long-term decline. All governments are ill-equipped to allocate economic resources, and the Russian government is no exception. There’s a significant mismatch between the duration of time politicians spend in office and the multidecade payoff of exploration and development expenditures of the oil and gas industry.

Faced with the allocation of Gazprom’s abundant cash flows, even a well-intentioned politician has tremendous incentives to divert the funds toward social programs (i.e., paying pensions to retirees, increasing teachers wages, etc…) that have a more apparent, immediate social impact (read re-electable) than exploration and development projects that require a tremendous outlay of capital upfront and have a payoff decades in the future.

Private enterprises such as foreign oil companies (not covert, government-controlled entities such as Gazprom) have the appropriate time horizons, the needed capital, and the know-how to get the oil and gas out of Russia. Unfortunately, in lieu of recent developments, they’ll be committing less capital to Russia rather than more.

After seeing the current developments, CFOs of foreign companies that were contemplating doing business in Russia are increasing their required return on capital assumptions in their models. As the required rate of return goes up, fewer projects become profitable — and less foreign capital will flow to Russia. Companies that have already invested in Russia — ExxonMobil (NYSE: XOM), BP (NYSE: BP), Conoco Phillips (NYSE: COP), and others — are wondering if they’ll be the next “environmental” culprits and may be trying to find a graceful way out. Can you blame them?

Captain's Quarters reports that either Russia has lost control of its nuclear weaponry or else it has decided to release it upon the world in an endless series of assaults. The Captain can't decide which scenario is the more ominous and, quite frankly, neither can La Russophobe. One thing's for sure, though: If the world had listened to us russophobes earlier, we wouldn't be in this mess. Here's the Captain's description:

Georgian officials, with the cooperation of American investigators, managed to snare a man selling weapons-grade uranium last summer, a victory against black-market proliferation. The victory has been fleeting, however, as the combined task force has not been able to trace the source of the material to determine the origin of the uranium. Just as in another, more splashy case of rogue nuclear material, the problem results from Russian intransigence:

"Given the serious consequences of the detonation of an improvised nuclear explosive device, even small numbers of incidents involving HEU (highly enriched uranium) or plutonium are of very high concern," said Melissa Fleming of the U.N.'s International Atomic Energy Agency.

Details of the investigation, which also involved the FBI and Energy Department, were provided to The Associated Press by U.S. officials and Georgian Interior Minister Vano Merabishvili.

Authorities say they do not know how the man acquired the nuclear material or if his claims of access to much larger quantities were true. He and three Georgian accomplices are in Georgian custody and not cooperating with investigators.

Merabishvili said Georgian attempts to trace the nuclear material since the arrest and confirm whether the man indeed had access to larger quantities have foundered from a lack of cooperation from Russia.

Merabishvili said he was revealing the story out of frustration with Russia's response and the need to illustrate the dangers of a breakdown in security cooperation in the region.

Russia has not covered itself in glory in recent months, even apart from the increasingly autocratic domestic policies of the Vladimir Putin administration. One of its former agents wound up dead through poisoning by polonium after he started criticizing Putin. Now a sample of HEU winds up on the black market, and Russia won't cooperate.

A couple of scenarios could be in play. The first is that Putin has decided to gain hard cash by putting fissile material on the black market, which is not only insane but counterproductive. After all, Putin has his own insurgencies in the Caucasus, and the material could just as easily find its way there rather that against Putin's enemies. The second possibility is even more frightening -- which is that Russia has lost control over its nuclear materials and wants to keep the West from discovering it.

In any event, the lack of cooperation on such a danger speaks volumes about security arrangements in the former Soviet republics. It's no secret that Georgia has angered Russia in its efforts to spin out of Putin's orbit, and if this intransigence is Putin's idea of retribution, then we can pretty much kiss nuclear security in that region good-bye. Apparently, rogue proliferation matters less to Putin than petty squabbles and influence peddling. Such a ruler is no partner for peace and economic stability, and Putin seems intent on proving that in other areas as well, such as energy transport and arms dealings with Iran.

We used to excuse the exceptions to good relations from Russia and Putin. It's difficult to see anything else these days.

The following is adapted from a speech delivered on October 3, 2006, at a Hillsdale College National Leadership Seminar at the Drake Hotel in Chicago, Illinois by former Kremlin economics guru Andrei Illarionov (pictured, left), recently made available on Hillsdale's website:

The Destruction of Freedom in Russia

The story of the destruction of freedom in my own country, Russia, is sad. But this story should be told, should be known, and should be remembered—to avoid repeating it and in order one day to reverse it.

First, there was an assault on the people of Chechnya. Many Russian people thought that it was not their business to defend the freedom of the Chechen people. People in Chechnya lost their independence, their political rights and—many of them—their lives. Many Russians lost their lives as well.

Then there was an assault on the Russian media. This time many Russian people thought that it was not their business to defend the freedom of the media. As a result, the media lost its independence—first television channels, then radio stations and newspapers. And now the censors are turning their attention to the Internet.

Then there was an assault on private business. Many Russian people thought that it was not their business to defend the freedom of private business. So private business has lost its independence and has become subjugated to the caprice of the executive power. This has been accomplished through so-called PPPs or public-private partnerships, but it would be more correct to call what is happening CPC—coercion of private business by the corporation in power.

Then there was an assault on the independence of political parties. Many Russian people thought that it was not their business to defend the independence of political parties. As a result, independent national political parties ceased to exist.

Then there was an assault on the independence of the judiciary. Many Russian people thought that it was not their business to defend the independence of the judiciary. Now, there are no more independent courts or judges in Russia.

Then there was an assault on the election of regional governors. Many Russian people thought that it was not their business to defend free elections of regional governors. Today, regional governors are appointed by the president, and there are no more independent regional authorities in the country.

Then there was an assault on the independence of non-governmental and religious organizations. Finally, some people tried to defend the freedom of these organizations, but it was too late. And now even those who want to resist have neither the resources nor the institutions required to fight back.

As a result, Russia has ceased to be politically free. For 2005, Freedom House’s Freedom in the World ranks Russia 168th out of 192 countries. Transparency International’s Global Corruption Report ranks Russia 126th out of 159 countries. The World Economic Forum calculates that Russia is 85th (among 108 countries) in avoiding favoritism in government decisions, 88th (also of 108) in its protection of property rights, and 84th (of 102) when measured by the independence of the judicial system. The Russian government could form another G-8 with countries that destroyed the fundamental institutions of modern government and civil society as quickly as it did over the past 15 years by partnering with Nepal, Belarus, Tajikistan, Gambia, the Solomon Islands, Zimbabwe and Venezuela.

What is the Russian government doing now, when it has destroyed freedom and achieved next to full control over Russian society? Is it stopping its assaults? No. It continues them, both within and beyond Russia’s borders. Inside the country, the government has started a campaign against human rights. It has created and financed detachments of storm troopers—the movements “Nashi” (“Our Own”), “Mestnye” (“Locals”), and “Molodaya gvardiya” (“Young Guard”)—which are being taught and trained to harass and beat political and intellectual opponents of the current regime. The days for which these storm troopers are especially trained will come soon—during the parliamentary and presidential elections in 2007 and 2008.

Beyond Russia’s national borders, the government provides economic, financial, political, intellectual and moral support to new friends: leaders of non-free countries such as Belarus, Uzbekistan, Venezuela, Myanmar, Algeria, Iran, and Palestinian Hamas. At the same time, Russia is attempting to destroy hard-won freedom and democracy in neighboring countries. Ukraine, Moldova and Georgia find themselves in a new cold war as Russian authorities pursue hostile policies involving visas, poultry imports, electricity, natural gas, pipelines, wine, and even mineral water. The Russian government has just started a full-scale blockade of Georgia. Meanwhile, the state-controlled Russian media has launched a propaganda war against Ukraine, Moldova, Georgia, the Baltic countries, Europe and the United States.

What do non-free countries have in common? What unites such disparate countries as Nepal, Belarus, Tajikistan, the Solomon Islands, Gambia, Venezuela, Zimbabwe, North Korea, Sudan, Turkmenistan, Cuba, Myanmar, and yes, now Russia? Only one thing: war, in which governments take away property and destroy society, in which they send people to camps or kill them solely because they have a different perception of the world, of faith, of law, and of their homeland. Only through hatred, fear, and electoral violence can these governments hold on to what is dearest to them—absolute power.

Without freedom there can be no open discussion of topics of national and international importance. There is an exclusion from public life of conversation about the most important matters. This primitivizes public life, degrades society, and weakens the state. The politics of non-freedom is the politics of public impoverishment and of the retardation of the country’s economic growth.

The greatest practical lesson of Russia’s recent history is that freedom is indivisible. The failure of freedom in one sphere makes it harder to defend freedom in other areas. Likewise, the fall of freedom in one country is a blow to global freedom. The inability to defend freedom yesterday comes back to haunt us at a great price today and perhaps an even greater price tomorrow.

Looking Ahead

What position should the United States and other free countries take regarding Russia’s growing internal authoritarianism and external aggression? There was a real opportunity over the last several years: Concerted efforts by the West could have slowed significantly, if not stopped, the degradation of freedom in Russia. But nothing was done. One of the West’s last chances was to deny access to its capital markets for the sale of assets stolen from the large private company Yukos; but this did not happen, and the sale of those assets occurred at the Rosneft IPO on the London Stock Exchange. The July 2006 G-8 summit in St. Petersburg could also have been used to emphasize the clear distinction between leaders of the free world and those of non-free Russia. But in the end, nothing was done.

As I wrote in the Washington Post in April 2006:

The G-8 summit can only be interpreted as a sign of support by the world’s most powerful organization for Russia’s leadership—as a stamp of approval for its violations of individual rights, the rule of law and freedom of speech, its discrimination against nongovernmental organizations, nationalization of private property, use of energy resources as a weapon, and aggression toward democratically oriented neighbors.

By going to St. Petersburg, leaders of the world’s foremost industrialized democracies will demonstrate their indifference to the fate of freedom and democracy in Russia. They will provide the best possible confirmation of what the Russian authorities never tire of repeating: that there are no fundamental differences between Western and Russian leaders. Like us, Russia’s leaders will say, they are interested only in appearing to care about the rights of individuals and market forces; like us, they only talk about freedom and democracy. The G-8 summit will serve as an inspiring example for today’s dictators and tomorrow’s tyrants.

The West squandered both of these opportunities. None of the G-7 leaders had enough courage to raise the issues of freedom and democracy, or to discuss the principles of true constitutionalism and their absence in Russia. Everyone pretended that nothing special was going on in Russia. Indeed, the G-7 leaders agreed de facto with the Russian authorities’ approach to energy security. Instead of liberalizing and privatizing energy assets, Russia is moving in the opposite direction both internally—by nationalizing private companies and asserting state control over the electricity grid and pipeline system—and internationally, by using non-market methods to manage supply and even demand for the world’s energy resources.

Several months after the summit, the bill for this policy of appeasement is due. Now the Russian authorities are revoking the licenses of American and British energy companies in Sakhalin. BP has found itself under pressure to exchange its partner in TNK-BP in favor of the government-owned Gazprom. Otherwise, it will not have a chance to explore the giant Kovykta gas field in eastern Siberia. The billion dollars it spent on the purchase of Rosneft shares in July 2006 did not help BP much. And there is no doubt that, after the G-8 summit, the free world can expect more of the same. In truth, it should consider itself in a new Cold War-like era.

* * *

Let me conclude these remarks with words spoken by Winston Churchill about another great war for freedom:

I would say to the House, as I said to those who have joined this government: “I have nothing to offer but blood, toil, tears and sweat.” We have before us an ordeal of the most grievous kind. We have before us many, many long months of struggle and of suffering. You ask, what is our policy? I can say: It is to wage war, by sea, land and air, with all our might and with all the strength that God can give us; to wage war against a monstrous tyranny, never surpassed in the dark, lamentable catalogue of human crime. That is our policy. You ask, what is our aim? I can answer in one word: It is victory, victory at all costs, victory in spite of all terror, victory, however long and hard the road may be; for without victory, there is no survival.

That war for freedom was won. We may yet win, indeed we must win, this current war. But to win, we must work together.

Playing on the phrase "Murder, Inc." a 14-page article titled "Kremlin Inc." in the January 29th issue of the New Yorker (currently on newstands) contains a scathing indictment of Vladmir Putin, whose scowling visage emblazens the piece in a magnficiently malevolent two-page cartoon, for the murders of Khlebnikov, Politkovskaya and Litvinenko. Unavailable online, the piece concludes with this icy blast as Politkovskaya speaks from the grave:

I have wondered a great deal about why I am so intolerant of Putin. Quite simply, I am a 45-year-old Muscovite who observed the Soviet Union at its most disgraceful in the 1970s and 1980s. Putin has, by chance, gotten his hands on enormous power and has used it to catastrophic effect. I dislike him because he does not like people. He despises us. He sees us a means to his ends, a means for the achievement and retention fo personal power, no more than that. Accordingly, he believes he can do anything he likes with us, play with us as he sees fit, destroy us as he sees fit. We are nobody, while he whom chance has enabled to clamber to the top of the pile is today Tsar and God. In Russia we have had leaders with this outlook before. It led to tragedy, to bloodshed on a vast scale, to civil wars. I want no more of that.

First Post reports on the demise of the Russian language (hat tip: Ruminations on Russia and Global Voices).

If Vladimir Putin gets his way, the next 12 months are going to be very special indeed. For he has decreed that 2007 is The Year of the Russian Language.

A rather late New Year's gift, you might think. But nyet: Russia's traditional 'Old New Year' - according to the Gregorian calendar - fell on January 13, so there is still plenty of time to celebrate this momentous declaration. Russia's Ministry of Foreign Affairs will be informing UNESCO and "all interested international parties" imminently.

This may seem a laughable and bizarre move, were it not a remedy for a serious problem. Numbers of Russian speakers have been declining annually since the collapse of the Soviet Union. Russian is the fourth most spoken language on earth behind English, Chinese and Spanish, but by 2025 it will be pushed into 10th place, eclipsed by French, Hindi, Arabic, Portuguese and Bengali.

One of the main reasons for this is Russia's low birth rate: 700,000 speakers die out every year. And in the former Soviet republics, Russian is no longer the elite choice of second language - they would rather learn English now.

Similarly, in many Central and Eastern European countries, Russian has a major image problem: the older generation wince at the memory of their compulsory lessons under Communism. Even in the UK, British universities report decreasing numbers of applicants to Russian courses: as a subject it has long since lost its Cold War cachet. Arabic is the new must-speak.

But maybe Putin's New Year wish is not a pipe dream. One report claims that in Poland last year there was a twofold rise in Russian language university applicants and concludes that Russian is increasingly considered a requirement for a career in business.

Check out La Russophobe's latest on Publius Pundit in which she explores the Russian energy attack on Belarus with an eye towards identifying how the West should be respond. Feel free to leave your own ideas in the form of a comment on this vital foriegn policy question.

The Moscow Times reports on yet another explosion of crazed nationalism in Russia, this time aimed at tiny Estonia's desire to remove a monument (pictured below, right) to Russian soldiers from it's main city. This is like the French objecting to Russia removing a monument to Napoleon from downtown Moscow on the grounds the Napoleon heroically tried to free Russians from their evil Tsar (who, after all, Russians would soon depose on their own initiative). Note the comment by the Russian Duma that Estonia's action "will obviously lead to ... the further alienation of the peoples of Russia and Estonia." They say it like they think Estonians would consider that a BAD thing. Pictured above right are members of the pro-Kremlin youth cult "Nashi" ("us Slavic Russians") dressed up in World War II soldiers' unforms and protesting the Estonian "outrage." Ah yes, the idealism of youth. Today's Russians seem every bit as detached from reality and hell-bent on self-destruction as were their Soviet counterparts.

Russian lawmakers launched a scathing attack on Wednesday against the Estonian government's plans to relocate Soviet soldiers' graves and a monument to the Red Army in downtown Tallinn. "Estonia is meddling with victims and memorials. This is a historic mistake," Federation Council Speaker Sergei Mironov said after the upper house voted unanimously in favor of a resolution condemning the relocation, Interfax reported.

In its resolution, addressed to the governments of all former Soviet republics and European countries the Federation Council called a law permitting the relocation of military graves "an attempt to legalize fascism."

"This will obviously lead to ... the further alienation of the peoples of Russia and Estonia," the resolution stated.

Lawmakers were not alone Wednesday in blasting Estonia's intention to move the graves and a Soviet-era bronze statue of a Red Army soldier that hails the Red Army as liberators of Estonia from German occupation. On Manezh Square, hundreds of members of the United Russia party and the pro-Kremlin youth organizations Young Russia and Nashi protested the proposed move. "The removal of the memorial amounts to the destruction of the memory of the liberators," Nashi spokeswoman Anastasia Suslova said. Suslova said that if the statue were removed, a member of Nashi would stand in place of the statue as "a living monument to the liberator."

In Tallinn on Wednesday, the Estonian parliament considered a bill on the "removal of forbidden structures," which would have given authorities the right to move the Red Army statue, where many people gather to celebrate Victory Day each year. Raivo Jarvi, a member and acting spokesman of the Estonian Reform Party, said by telephone Wednesday that the bill would also ban "structures that glorify the occupation of the Republic of Estonia," such as the Red Army statue. Jarvi insisted the statue would not be destroyed, however, but moved to a Soviet-era seaside military cemetery. "People are offended by the presence of the monument in the center of the city," he said. The bill failed on a second reading, however. "The bill was rejected in its present form," Estonian parliament spokesman Gunnar Baal said. Baal denied that Russian protests had influenced the outcome of Wednesday's vote. "A few more details need to be added before it comes up for another vote," he said.

Estonia's parliament did give preliminary approval Wednesday to a bill that would forbid the public display of Soviet and Nazi symbols, Interfax reported.

Also in Tallinn, members of various Russian organizations submitted a petition to Estonian President Toomas Hendrich signed by some 17,000 residents who oppose the removal of the Red Army statue, Interfax reported.

The remains of several Soviet soldiers are believed to lie in unmarked graves under a bus stop located a few meters away from the statue at a busy intersection in central Tallinn.

On Jan. 10, Estonia passed into law a bill on the protection of military cemeteries, which allows for the transfer of the remains of buried Soviet soldiers to clearly marked cemeteries.

The Geneva Convention, which came into force in 1950, forbids the burial of war victims in unmarked graves. The convention was ratified by Russia in 1954 and Estonia in 1993.

The conflict over the proposed removal has been escalating for several weeks. During a meeting with German Chancellor Angela Merkel last Sunday, President Vladimir Putin said: "Estonia wants a seat in the front row and to gain some kind of advantage."

Defense Minister Sergei Ivanov and Konstantin Kosachyov, head of the State Duma's Foreign Affairs Committee, have also voiced their outrage in recent days.

Estonian Prime Minister Andrus Ansip weighed in Wednesday, criticizing Russia for using the threat of economic sanctions to solve political spats. "The Estonian people will decide for themselves how to arrange their affairs in their republic," Ansip said, Interfax reported. "Russia's threats cannot influence the decisions of a democratic sovereign state."

Also Wednesday, the Council of Europe -- one of the addressee's of the Federation Council's resolution -- entered the fray. Terry Davis, Secretary-General for the Council of Europe, said in e-mailed comments that Red Army soldiers deserved "respect and gratitude" for fighting against the forces of Nazi Germany. "On the other hand," Davis continued, "the Soviet Army was an occupying force in Estonia, which is the reason why some Estonians object to the monument." Davis called for the fallen soldiers to be treated with "dignity and respect."

At the heart of the dispute is the role that Soviet forces played in Estonia after German occupation ended in 1944. Russians take pride in the victory over the Nazis by the Soviet Army, which was hailed as a liberating force. Many Estonians, however, view 1944 as simply a transition between two occupying armies that marked the start of decades of oppressive communist rule.

As Russian-Estonian relations have cooled in recent years, the statue in central Tallinn has been the site of sometimes-violent clashes between ethnic Russians and Estonians. Demonstrations there have been banned. "Russian young people gather and wave the flag not of Russia, but of the Soviet Union," Jarvi said. "For Estonians, the Soviet flag is the same as the Nazi flag. Both occupations were by the same kind of totalitarian regime."

Writing on Robert Amsterdam's blog, hero journalist Grigory Pasko reminds us of the tortuous saga of YUKOS lawyer Svetlana Bakhmina (pictured, left), whom he calls a "hostage of the prosecutor" and a "political prisoner."

Svetlana Bakhmina worked at YUKOS in the post of deputy head of the legal department. The nature of her position was such that it was quite impossible for her in any way to influence those decisions that were adopted by the upper management of the company. Nevertheless, in December 2004, Svetlana was arrested and placed in women’s investigative isolator No. 6 of the City of Moscow. Prior to this, she had been interrogated during the course of six hours. The interrogation ended when the interrogatee suffered a heart seizure.

Why was Bakhmina locked up? It isn’t difficult to guess that this was done after she had refused to give false testimony with respect to her managers. A second reason was to force her immediate superior – Dmitry Gololobov – to voluntarily return from abroad and appear before the procuracy.

Later, Svetlana was charged under Article 160 of the Criminal Code of the RF (acquisition or misappropriation of the property of others [i.e. embezzlement—Trans.]). From the moment of the arrest, the Procuracy-General of the RF declared numerous times about the impossibility of changing the remand measure of restraint from confinement under guard to a written pledge not to leave town, despite the fact that Svetlana Bakhmina is the mother of two young children and does not present a menace to society.

In the opinion of human rights advocates, the procuracy is using the arrest of a woman who isn’t guilty of anything as an instrument to exert pressure on the already convicted YUKOS chiefs, Mikhail Khodorkovsky and Platon Lebedev, as well as with the objective of blackmail with respect to those members of the company who are found abroad. That is, Bakhmina is a hostage of sorts for the procuracy.

Consideration of the case with respect to Bakhmina commenced on 17 October 2005 in the Simonovsky District Court of Moscow. The verdict was read on 19 April 2006: Bakhmina was sentenced by the Simonovsky Court to seven years of deprivation of liberty for the theft of monetary funds from YUKOS-owned OAO “Tomskneft-VNK” in a sum of 8 billion rubles and for the non-payment of taxes. Later, the Moscow City Court, where the “YUKOS-Moscow” lawyer’s defence applied with a cassational appeal, reduced the punishment for Bakhmina from seven to six and a half years. The court struck out the tax evasion charge against Bakhmina due to the expiration of the statute of limitations, leaving only Article 160 of the Criminal Code of the RF (“acquisition or misappropriation, that is theft of the property of others”).

The Procuracy-General of the RF charged Bakhmina with having committed theft by way of the acquisition in the years 1998-1999 of the property of OAO “Tomskneft” with the use of her official position within the makeup of an organized group in a large amount for an overall sum in excess of 8 billion rubles.

Bakhmina herself has never – either during the course of the investigation or in trial – admitted her guilt with respect to a single count of the charges, and asked the court to rule for an acquittal. She brought the court’s attention to the fact that she could not have committed the actions imputed to her, inasmuch as in the year 1998, she had occupied a low-ranking position at YUKOS and could not independently adopt decisions with respect to “Tomskneft”.

In December 2006, the Moscow City Court denied the appeal of Svetlana Bakhmina’s defence lawyers against the decision of the Simonovsky Court of Moscow, which had refused to defer the execution of the punishment of the deputy head of the “YUKOS-M” legal department. The defence lawyers had asked for the punishment to be deferred by 9 years – until the attainment of the age of 14 by Bakhmina’s younger son.

The ruling of the Simonovsky Court indicated that the children aged 5 and 9 are found in the custody of the father and two grandmothers. The defence, on the other hand, had insisted that the grandmothers can not carry out the duties of guardians, because one is an invalid of the 2nd group, and the other is forced to work.

In his turn, procurator Nikolai Vlasov declared that a deferment of 9 years in the execution of the sentence is one of the forms of amnesty that can not be applied to Bakhmina.

Bakhmina’s younger child is now five years old, the older – nine. In accordance with the law, a female convict, if she has young children, may ask for a deferment in the execution of the sentence until the attainment of 14 years by her youngest child.

Russian human rights advocates consider Svetlana Bakhmina a political prisoner of contemporary Russia.

INTERFAX reports:

MOSCOW. Jan 24 (Interfax) - One hundred thirty-three people, including 14 children, have been hospitalized in the Lipetsk and Voronezh regions with hemorrhagic fever, the information department at the Russian Emergency Situations Ministry told Interfax on Wednesday. The number of people with symptoms of hemorrhagic fever seeking medical assistance began to grow in September in the Voronezh region and in December in the Lipetsk region. "The situation was caused by an increase in the number of rodents due to favorable weather conditions, which resulted in an ample food supply in that period," the ministry said.

Finnish expat blogger Tero Paananen of The Mad Finn has this to say about the ridiculous notion that there is some "third way" for Russia (in short, he sees it merely as the enabling of dictatorship and failure):

The situation of NGOs has gone from bad to worse in Russia during President Vladimir Putin’s reign. The authorities are doing their utmost to eliminate the emergence of a free civil society. The government is trying to subjugate any signs of civil expression, subordinate public opinion to state interest, and incorporate civil society into the government’s statial strategy.

Many NGOs in Russia defend those most vulnerable, and it is exactly these organisations that suffer the most from government repression. Those at the receiving end of this repression are thus the weak and the helpless. If we close our eyes from this, and choose to cooperate with “front” organisations enjoying state blessing, we are not only wasting our financial support, but are doing real damage to the very people we wish to help.

Stating a few obvious facts: The Russian Federation is a state, which engages in an open war of terror against its own citizens. Authorities at both federal and local level attack, terrorise, and kill their own fellow citizens. Russia is no state governed by law.

Government pressure on NGOs does not depend on the NGOs themselves, but on the political and economic interests of the ruling elites. Authorities do not react to the actions of NGOs, but create themselves the conditions, in which NGOs are left with no way out; in which NGOs cannot avoid an open confrontation.

It is the moral duty of Finland and other free nations, especially in the EU, to help our partners in Russia to survive. We cannot let the authorities intimidate our friends, drive them into a corner, and destroy everything we have achieved together in the past ten years. It is vital to continue the work and support one another.

Finnish experts often highlight the “uniqueness” of Russia’s development; most likely, this is because we wish to monopolise the expertees on Russia. It seems that Finns have stressed Russia’s uniqueness for so long that we have begun to believe in it ourselves. The end result of this is that the average Finn has a very hazy knowledge of our eastern neighbour; even those who have visited Russia only see what they want to see.

Many are simply unable to regard Russia with common sense, according to the same human standards that we regard other states and cultures. Instead, many choose to spread all sorts of fictitious legends and metaphysical constructions about Russia. It often seems that economists have the clearest idea of what is going on in Russia, because they usually understand the value of money. And money is the only thing Russia’s ruling elite is ever interested in.

The uniqueness of Russia’s development, the so-called “Third Road”, is the artificial ideological construct that the notion of a “Sovereign Democracy” that Putin’s regime has declared is based on. This “Sovereign Democracy” is ruled by the “Power Vertical” — the authoritarian power apparatus of Putin’s presidential administration. By stressing Russia’s uniqueness, we are, in fact, lending support to the development of authoritarianism that lies behind the troubles Russia is facing today.

FINNISH-RUSSIAN CITIZENS’ FORUM ESTABLISHED

A group of persons worried about the development of democracy and the state of human rights in Russia has established a non-governmental organisation, Finnish-Russian Citizens’ Forum.

The organisation’s aim is to “promote cooperation between citizens and different peoples in Finland and the Russian Federation by supporting non-governmental organisations in their effort to strengthen democracy, human rights, and freedom of speech in Russia”.

The murder of the Russian journalist and civil rights activist, Ms Anna Politkovskaya, acted as a catalyst for establishing the Citizens’ Forum. This sad event served to consolidate cooperation between people concerned about Russia’s current development, prompting several appeals, public discussions, and demonstrations in autumn 2006.

The Citizens’ Forum supports Russian non-governmental organisations, which are now facing difficulties in their work due to Russia’s new draconian law on NGOs. The Citizens’ Forum will invite representatives of Russian organisations to Finland, organise visits to Russia, and distribute information about the situation in Russia.

The Citizens’ Forum will soon open its web site at www.finrosforum.fi.

The Chairperson of the Finnish-Russian Citizens’ Forum is Ms Heidi Hautala, MP (The Greens). The organisation’s Deputy Chairman is Mr Jukka Mallinen, Chairman of the Finnish PEN Club. The Citizens’ Forum has a nine-member Board. Mr Mikael Storsjö, entrepreneur, serves as the board’s Secretary, and Ms Iida Simes, producer, as the Board’s spokesperson.

The name of the new organisation translates into Swedish as “Finsk-ryska medborgarforumet”, and its domicile is in Helsinki. The Citizens’ Forum carries an unofficial name in Russian: “Finsko-rossiyskiy grazhdanskiy forum”.

Writing in the Washington Post, Russia pundit Masha Lipman lays out the hard facts concerning Russian progress under Vladimir Putin:

Since the beginning of Russian economic reforms 15 years ago, liberal scholars and experts inside and outside Russia have talked about a democratic polity, rule of law, liberal political freedoms and civic liberties as necessary prerequisites for stable economic development.

But after fifteen years the country can't boast about achieving any of these things. All political institutions except the presidency have been emasculated. All political power has been concentrated in the Kremlin. Decision-making is hidden from the public eye. Public political competition is non-existent and the mass media tightly controlled so Kremlin policy-makers do not have to worry about accountability. The judicial branch is effectively controlled by the executive, so in sensitive cases any court decision may be bent in order to further the interests of the ruling elite. The state has steadily increased control over the public space - autonomous public activism is unwelcome. Activist groups and figures are either co-opted, or, if they don't submit to the Kremlin's control, they are marginalized, neutralized and discredited. The most recalcitrant are intimidated and harassed.

Meanwhile, the GDP has steadily grown, amounting to about one trillion U.S. dollars in 2006, and the macroeconomic indices are quite impressive. Russia has radically reduced its foreign debt. The stabilization fund where excessive revenues (the fund is financed by export duties and the royalty on oil) from high oil prices have been accumulated since 2004 is close to 100 billion U.S. dollars. Moreover, it may be argued that never in Russia's history has the proportion of those who enjoy reasonably decent living standards been as high as it is today. Though the disparity of income is huge and growing, the number of those below the poverty line has decreased from about one-third to about one-quarter of the population. Substantial increase in people's salaries and pensions has resulted in a consumer boom which is registered in national statistics, and may also be observed in any of the country's shopping malls whose number is also growing. People not only buy more, they also feel better. At the end of 2006 the country's leading independent polling agency reported a noticeable improvement of general sentiments and expectations.

So has Russia defied the liberal logic? Of course what lies beneath Russia's economic success is the high prices of oil and gas, rather than improved economic policies. As a major exporter of both commodities, Russia has benefited tremendously. The question is what use Russia has made of this amazing stroke of luck.

It is increasingly evident that the opportunity created by the high energy prices has been largely squandered. Rather than taking advantage of this blessed spell in order to intensify the urgently needed reforms (the monumental distortions of the 70-year old Communist economy call for long-term and persistent reform effort), the Russian government has suspended or frozen nearly all structural change. In contrast to its macroeconomic records, in labor efficiency, transparency, and competitiveness, Russia's ratings are disgracefully low.

Diversification of the economy remains a distant dream. About 60 percent of the Russian budget's income is generated by oil and gas revenues, making Russia vulnerable to the fluctuation of the world prices on energy, metals, and a few other commodities.

The best assets are increasingly concentrated in the companies that either state-owned or controlled by the state. As a result, power and property are closely entangled. Economic and business decisions are politicized, and political decisions driven by narrow economic interests. The empowered state bureaucracy is driven by self-seeking interests and an anxiety about losing the perks of power, rather than by modernization and national development.

As in any area, in governance the lack of competition leads to a deterioration of quality. Indeed, the quality of governance is quite low. Decisions are frequently ad-hoc and not adequately prepared. But in the absence of public accountability nobody is held responsible and poor performance is not improved.

As a result, Russia faces everything from inefficient law-enforcement to inefficient health care (in Russia average life expectancy for men is barely 60, which is the official retirement age). The income-generating industries are not in good shape either.

As the government has radically expanded its role in the most lucrative areas of the economy, the growth of oil production has slowed down and the production of gas is barely growing at all. The government has strongly limited the participation of foreign companies in Russia's strategic industries, but in order to explore new deposits Russia needs large investment and technology that it does not seem to have. There is serious reason to doubt whether Russian can go it alone.

Increasingly, Russia's economic success looks temporary rather than sustainable. The paradox of the country's bad politics and good economy is thus resolved by the time factor. In the longer run, bad politics leads to economic deterioration.

The economists warn that Russia has exhausted the potential of the oil growth and point out the need to limit the involvement of the state in the economy, to counteract the anti-liberal trend of centralization and creeping nationalization and to push for modernization.

Switching to non-economic language, Russia needs to unleash public energies and initiatives rather than expand state control, and to encourage active public participation rather than passive compliance. This is impossible without a political improvement, and this is the only way to improve economic policies.

Writing in National Interest, Igor Khrestin, a Russian Studies researcher at the American Enterprise Institute, and John Elliott, a research associate in Russia and Eurasia Studies at the Council on Foreign Relations, expose the propaganda spewed out by the Kremlin's Dmitry Peskov over Russian support for Iran:

In a recent interview with National Interest online, President Putin’s first deputy secretary, Dmitry Peskov, firmly asserted that Russia is “the last country in this world that would want to have a nuclear weapon at its southern borders.”

The current Russian policy in the region, however, indicates otherwise. After Akbar Hashemi Rafsanjani publicly mused in 2001 that the “application of an atomic bomb would not leave any thing in Israel”, and despite an International Atomic Energy Agency finding that Iran was in non-compliance with the safeguards agreement of the Nuclear Non-Proliferation Treaty (NPT), Mr. Peskov refers to Iran’s right to “peaceful nuclear energy.” As such, Moscow habitually rejects comprehensive sanctions against Tehran and has effectively stalled the process by brandishing its veto power at the UN Security Council.

With the nuclear issue on the backburner, the Iranian regime is actively equipping and training militia groups and death squads operating in Iraq—without forgetting to dole out generous support to Hizballah and Hamas for actively terrorizing the Israeli population. Contrary to its supposed “partners in the war on terror” in the West, Russia considers neither group to be a terrorist organization. Moreover, after gaining control of the Palestinian parliament, Hamas representatives took up President Putin’s generous offer to visit Moscow last spring. Conspicuously, just days before the visit, local authorities in provincial towns of Volgograd and Vologda shut down two regional newspapers for reprinting the infamous “Muhammad cartoons.”

The doublethink on Iran and its proxies reflects a wider struggle in elucidating Russia’s Middle East policy—how does a nation balance vulnerability to Islamic extremism in its predominantly Muslim backyard with the continued support for a regime that can potentially—and fatally—endanger global security?

Russian and Iranian interests are historically divergent, with perceived spheres of influence overlapping in the Caucasus and the Caspian. In 1828, when the Russian tsar sent a diplomatic mission to negotiate the settlement terms of the second Russo-Persian war (the Treaty of Turkmanchai, which stipulated Iran’s surrender of modern-day Azerbaijan, Armenia and Georgia), a frenzied mob massacred practically the entire delegation. Among those killed was chief envoy and famous Russian playwright Alexandr Griboyedov, whose crime apparently consisted of not removing his boots in front of the Shah.

Ideologically, the two states could also not be further apart. The 1979 Islamic Revolution may have shattered Iran’s alliance with the United States, but neither did it bring Tehran and Moscow any closer. Ayatollah Ruhollah Khomeini purged leftists from the revolutionary coalition and considered the Soviet Union “godless.” In 1989, Khomeini penned a letter to Mikhail Gorbachev, urging the Soviet leader “to seriously investigate Islam—not because Islam or the Muslims need you, but because Islam can bring comfort and salvation to all people and solve the problems of all nations.”

While reality got in the way of realizing the Ayatollah’s dream, Iran did expand relations with Russia after the Soviet collapse. On August 25, 1992, Tehran and Moscow signed an US $800 million deal for Russian companies to build two nuclear reactors at Bushehr, as well as committed to sales of military hardware. During the lean and tumultuous 1990s, when oil prices bottomed out and Russia painfully deconstructed its command economy, the hard currency may have proved essential to prop-up the vast military-industrial complex. As Viktor Mikhailov, Russia’s then-minister of nuclear energy, stated: “What could Russia have brought onto world markets? We only had one strength: our scientific and technical potential.” Yet in 1995, after considerable American pressure, Boris Yeltsin halted weapons deliveries to Iran.

Economic considerations are hardly a concern for the current Russian government. The flow of petrodollars cleared all of the country’s external debts and bumped gold and foreign currency reserves to nearly $300 billion—with another $90 billion stashed in the rainy-day Stabilization Fund, accrued from windfall oil profits. With confident stride, Russia has begun to write off debts to poorer nations.

But one of the first steps of Putin’s presidency was to resume the sales of weapons to the Iranian regime. Recently, Moscow has landed somewhere around $1 billion for the sale of 29 Tor-M1 missile complexes, giving Tehran the ability to earnestly defend their “nuclear right.” While these sophisticated systems may not render Iran’s various strategic sites invincible, they nevertheless add a formidable layer of protection against potential U.S. or Israeli air strikes. On a visit to Jerusalem in 2005, however, President Putin firmly reassured the Israelis that “[Russia has] not taken a single step to disrupt the balance of forces and we will follow that pattern in the future.”

Russia’s resurgent realpolitik has not gone unnoticed in the Middle East. Recently, the Arab and Iranian press roundly lauded Russia’s assertive role in the region. But at whose expense? As BBC correspondent and Middle East expert Konstantin Eggert explained in Lebanon’s Daily Star: “The rationale for Russia’s new course in the Middle East lies in the same motivation that drives Moscow’s foreign policy as a whole: primarily, deep dislike of the United States combined with a desire to at least partly avenge Russia’s defeat in the Cold War.”

Moscow’s policy towardTehrancould also cost it in areas where Russia-U.S. partnership has blossomed. Congress may well decide to vote down the recent “123 agreement”, which allows greater collaboration in civilian nuclear energy. The Russian government, which agreed to host spentU.S.nuclear fuel on its territory, would stand to lose an estimated $20 billion. In addition, several Russian companies have already been sanctioned byWashingtonfor supplying hardware toTehran, including state weapons manufacturer Rosoboronexport.

It's been almost half a year since we last reviewed the compositon of our readership by region of the world. Whilst we were not looking, La Russophobe has morphed into an international blog. As the charts below show, whilst the United States accounts for by far the single largest share of LR's readership, five months ago it was a majority, and now it is minority. Our Russian readership has nearly tripled, as has our British contingent. This not to say that there are fewer American readers now, they have dramatically increased in number; in September there were only 3,500 visits to the blog but in January there will be nearly 9,000 -- this means there were nearly 2,000 American visits in September and there will be more than twice as many such visits in January. But the share of non-American readers has increased even faster, which is not surprising given that America is more remote from the issues we cover involving the rise of the neo-Soviet Union than those in Europe. Of course, Americans should not think that their relative isolation means they can afford to relax, as World War II and the Cold War clearly showed. Nearly one out of every ten readers of this blog is Russian, and that's encouraging.

La Russophobe is proud to announce that our post translating Novaya Gazeta's article about the Kremlin's killer squads is now in the top dozen Google hits when you search the paper's name in English, out of nearly 300,000 available. Given that this post has only spent a few days in the blogosphere, this should be taken as an encouraging sign by NG's editors and staff that there is a vast reservoir of goodwill, respect and admiration the paper's heroic work (it's also some indication of LR's ever-increasing clout in the blogosphere). Truly, NG's writers are the greatest patriots alive in Russia today, maybe the greatest who have ever lived, risking their very lives to save an ungrateful country from its greatest enemies, those malignant little trolls who dwell within the Kremlin walls. Let there be no doubt that history will so record their struggles. They do, however, seem to be a bit confused in the management of their website, having allowed their article to simply go missing from its former address and end up buried in their archives, making other sources easier to access the story from.

This is a good time, then, to remember the excellent effort of U.S. Secretary of State Condoleezza Rice to meet with NG's editors in the aftermath of the Politkovskaya killing when she visited Moscow, a powerful snub to the Kremlin. Here is a transcript of the meeting, from the Department of State's website:

AMBASSADOR BURNS: It’s good to see all of you and once again not only convey my own sympathies but also introduce Secretary Rice and Sean McCormack, Assistant Secretary for Public Affairs. Madame Secretary, it’s terrific to have you here and thank you very much.

SECRETARY RICE: Thank you very much. First let me say that I am very much saddened, as was the entire world, by the brutal murder of Anna Politkovskaya. She was a heroine to many people.

She stood for what is best in independent journalism, a willingness to try to get to the truth at whatever cost. And if I may just say to you, Ilya, that while I know the world has lost someone who was a symbol, you have lost your mother and we are very saddened by that. But her work goes on, and Novaya Gazeta is a fine publication that I think represents a very good independent voice here in Russia.

The role of the independent press is extremely important in society, particularly for democratic development. And it’s important not just because it is an important value to have an independent press, although it is one of the most important values of democracy. But it also is important to the proper functioning of government in democracy.

People need information in order to hold their government accountable. And only through an independent press can that information be developed and communicated. And whether it is in fighting corruption or questioning government policies or communicating to the government the concerns of people, an independent press plays an extremely important role.

I want to encourage you to keep working. It is extremely important work, and we are very supportive of the role of independent media here in Russia. We know it has not been easy, but it is an important path -- an important road -- even if it’s not an easy one.

I am happy to take your questions or listen to any comments that you might have.

DMITRIY MURATOV: Indeed we must continue the work of Anna. However, in the course of the last six years, this is the third such tragic death at Novaya Gazeta. [Igor] Domnikov was murdered by professional killers, and now his assassins are in court. He was killed because of his professional activity. It was a corrupt official -- a deputy governor of one of the regions of Russia -- who actually ordered his assassination.

There was another mysterious death three years ago as well, when our deputy editor in chief who was also a Duma deputy [Yuri] Shchekochikhin was killed while working on a commission investigating corruption. His assassins have not been found. Now Anna [Politkovskaya] has been murdered. The people who killed her first followed her and watched her for a long time. They knew exactly when she would return after visiting her sick mother, and they knew that a week before she had buried her father. So when I learned of her assassination, I wondered how human beings could even sink that low.

I need to ask a purely human question: Is the price we pay for the right to engage in our professional duties as journalists not too high?

SECRETARY RICE: You have recalled for us a very sad history of the last six years and one with which I am familiar. There have been many tragedies for Novaya Gazeta, and you must feel it very personally. We have told the Russian Government that these murders and the murders of other journalists must be thoroughly investigated and people must begin to understand that those who have done this will pay the price.

It’s hard for me to answer your question because I know these have been great personal losses. It’s difficult to step back and give an abstract answer to a very personal human question. But I think that if you look at history and struggles in many different countries under many different historical circumstances, there have been people who sacrificed on the basis of principle, people who sacrificed for a cause and those sacrifices are never in vain because ultimately freedom will win out.

In particular, investigative journalists are very often in danger because by their very nature they expose the truth. Very often they run afoul of those who have a lot at stake and a lot to lose if the truth comes out. I recognize that it’s a very dangerous profession, but without investigative journalists who are willing to seek the truth, it’s very hard for a democracy to function.

If it is any comfort at all -- at a personal level I’m sure that it’s not-- at a professional level if it is any comfort you should know that these murders have received worldwide attention. People are watching. People are pressing for a full investigation and for punishment of those who have committed these crimes. You are not alone in your struggle.

QUESTION: How important is it for a politician to have feelings and emotions? I’m talking about feelings of kindness and openness.

SECRETARY RICE: It is important for people who are engaged in politics to have human emotions, compassion, and most importantly to have principles. I watch very carefully the influence and tremendous effect that political leaders can have on the lives of ordinary people, and they need to be people who understand their impact.

It’s very important for politicians, particularly in democratic societies, not to lose touch with the people that they represent. Even the President of the United States leaves the White House and visits with school children, or goes to a retirement home and sees the effects of our policies on older people. I think it’s very important for politicians, and I know that when the President does this it has a big effect on him.

Ultimately I think a politician has to lead people and not be led by them, and that very often means making difficult, sometimes unpopular decisions. People expect their leaders to do exactly that. If the job were only to make easy decisions, anyone could do it. Because it’s often a matter of difficult decisions, I think it takes a very special person to be a politician in a democracy. I admire very much our people who have entered political life. I admire people who want to serve their country in that way. It’s not easy because you’re very often making difficult, unpopular decisions for the good of a large number of people.

QUESTION: So politics is not just a form of business?

SECRETARY RICE: No, it’s not. It’s a form of service. [Politicians have] different values than those who go into other professions.

QUESTION: It’s part of the service sector?

SECRETARY RICE: No, it’s a form of public service.

MURATOV: I read a study by Reporters Without Borders [the Worldwide Press Freedom Index for 2005] that placed Press Freedom in Russia in 138th place. However, the United States is in 137th place for Press Freedom in Iraq. Is this due to self-censorship or is it government policy?

SECRETARY RICE: It’s certainly not government policy. But I’ll tell you something, I watch our reporting on Iraq every day, and our reporters in Iraq are very tough on the U.S. Government. It was the American press that exposed the very bad events at Abu Ghraib. That came out first in the American press. I don’t know what study you’re talking about, but the U.S. press reports exactly what they think, and they try to do it accurately. With press reporting -- with freedom of the press-- goes responsibility. It’s not just reporting anything you hear or anything someone tells you. The American press tries to be accurate in what they are reporting, but they report in the very toughest of circumstances.

There is one circumstance that sometimes the American press will not report: if it is going to put our soldiers in danger. Then they may decide that they do not want to report on something that might cost American soldiers their lives. That’s another part of press responsibility. The government can’t force The New York Times not to print something, but The New York Times can decide if something is potentially dangerous to the lives of American soldiers and not print it.

QUESTION: Moscow is the tail end of a long and difficult trip. Do you think there will be a second nuclear test? What should we do about the North Koreans? Should we start buying gas masks for the Russian Far East?

SECRETARY RICE: It has been a long trip, but it’s been a very good trip because I was able to see the strong cohesion, the strong unity of the international system in opposing what North Korea has done.

I have just talked with Sergey Lavrov and I will talk later with President Putin. The most important thing now is that we need to implement fully the Security Council resolution that we have passed so that we can deal with the risks associated with the North Korean program. I don’t know if North Korea will test again. They crossed a line in the international system when they tested the first time. I don’t know if they will test again. But if they were to test again, they would only deepen their own isolation because I think there would be even another response, a greater response if they tested again.

The most important goal now must be to get North Korea to dismantle the nuclear program that it has. We have an agreement from last September in the context of the six-party talks about how to get the dismantlement of the North Korean program, and we need to implement that. But you’re right, it’s a very dangerous situation, and the international community needs to be serious in its response to North Korea and to show North Korea that it really has no other option but to dismantle its nuclear program if it wishes to receive any benefits from the international system.

QUESTION: What about gas masks?

SECRETARY RICE: Not yet.

DMITRIY MURATOV: [Gives the Secretary a business card of Anna Politkovskaya’s] This was hers.

SECRETARY RICE: Thank you, I’ll keep it as a good memory.