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Special Report by The Real Russia Project of Discovery Institute
Since the collapse of the Soviet Union, the U.S. media's overarching, if unspoken, perception of Russia and Eastern Europe is that this region doesn't matter much any more. Though some still see Russia as a dangerous enemy, most mainstream media appear to have lost interest in what happens there, except for occasional sensational events. As a result, there is inadequate awareness in America of the fascinating cultural, political and economic developments taking place in today's Russia.
Relying on old Cold War stereotypes ignores centuries of Russia's history and shows a lack of curiosity about its future. Such indifference is not in the interest of America or its citizens, and it threatens to shut down imagination about potential cooperative relations with Russia and her neighbors. The Real Russia Project aims to focus on the emerging new Russia with accurate and fair reporting and analysis--without fear or favor.
Ambassador Bruce Chapman
President of Discovery Institute
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1 -- Putin is a former KGB agent who is suppressing opposition and accumulating power
"He has beaten all his adversaries: independent media, oligarchs, regional governors, communists, liberal parties, the parliament as such and even the government apparatus. The power they once wielded is being seized by Mr Putin's KGB friends ... the KGB men move into the commanding heights of the economy ... a whole floor of former or current KGB in newly prominent positions on the president's staff." ("Putin's Quest for Power is Harming Russia" by Anders Aslund, Carnegie Endowment; Financial Times, August 23, 2004)
RussiaBlog: Like many others in the Russian elite, it is true that Putin was once a KGB officer. The KGB, however, no longer exists; it disintegrated in 1991 with the fall of the Soviet Union. And by the early 1980s, the organization had been almost completely transformed. One thing KGB became known for was hiring bright, capable young people. If Putin was preoccupied with power, he would be seeking a third term as a President, but he has made it clear that he has no such desire. After all, he could be drawing a higher salary with less pressure as the head of Gazprom.
Liberal democratic parties in Russia are largely unpopular for their association with Yeltsin's corrupt regime; they lack the ability to unite as one oppositional force and do not have a clear economic or political plan for the nation. Many Russians greeted the abolition of direct governors' elections with relief because the governors lacked accountability and were violently abusing their powers. Many criminals and oligarchs were buying their way into legal immunity with bribes during election campaigns.
The years 2005 and 2006 have been especially rich with dissent and protests. The still-popular Communist Party marched alongside Russian fascists in Moscow on May 1, 2006, displaying anti-government banners, including one which read, "Putin and successors go to hell!" Consider, by contrast, how unlikely an anti-government march of that kind would be in Iran, China or North Korea.
2 -- Russians live under Putin's tyranny
"Vladimir Putin, the aspiring dictator of Russia, has forced President Bush to reveal how committed he really is to the cause of democracy around the world. Putin's decision ... is an unambiguous step toward tyranny in Russia." ("Stand up to Putin" by Robert Kagan, The Washington Post, September 15, 2004)
"Putin characterized the changes as enhancing national cohesion in the face of a terrorist threat, while critics called them another step toward restoring the tyranny of the state 13 years after the fall of the Soviet Union." ("Putin Moves to Centralize Authority" by Peter Baker, The Washington Post, September 14, 2004)
RB: Putin was elected with 71 percent of the vote in 2004. Not only are the Russian people active in democratic processes, but 70 to 80 percent of citizens approve Putin's leadership, and many would like to see him stay on for a third term. The latter is impossible according to the Russian constitution. Average Russian salaries have increased by one third in the last two years. Individuals and businesses alike have actually begun to claim their real incomes, paying taxes, and planning long-term savings and business strategies, due to the stability brought by Putin's administration. Russia's federal budget has been in surplus since 2000; in 2006 the surplus reached 8.7 percent of GDP.
3 -- Russian media isn't free
"The Putin administration has grown uglier: the media is now--with a few embattled exceptions in print and on the Internet--entirely under state control." ("Meet the Chief Exec of Kremlin Inc." by Nick Paton Walsh, The Guardian, July 6, 2005)
RB: Far from simply affirming the government's actions, many Russian media outlets are openly critical of the Kremlin--and some refuse to acknowledge any positive changes achieved in the last few years. There are approximately 1,100 TV channels, 670 radio stations and 50,000 newspapers in Russia. Independent Internet media is very popular where Internet access is available. Only 20 percent of the population gets their information from state-owned media, with the majority of Russian TV-viewers preferring private programming and entertainment. In Russia, Western TV news channels such as CNN, FOX, BBC, Euronews, and others are widely available and often freely broadcast.
4 -- Khodorkovsky is a political prisoner
"The European Court of Human Rights ... has fast-tracked a complaint by the former Yukos Oil oligarch Mikhail Khodorkovsky, jailed on charges of tax evasion and fraud after he challenged Putin politically." ("Reversal of Fortune" by Owen Matthews, Newsweek International, April 2, 2006)
RB: YUKOS was practicing tax evasion on a massive, multibillion-dollar scale. A deeper investigation is now underway, and Khodorkovsky's aides face charges of murder and attempted murder in the process of conducting company business. They were also charged with unlawful business practices, such as tax evasion, fraud and money laundering. In addition, Israeli lawyers are working with Russian prosecutors to extradite Khodorkovsky's former partner Leonid Nevzlin, as many political circles in Israel find his presence harmful to their country's image. Israeli lawyers are investigating allegations that Nevzlin fraudulently obtained his Israeli citizenship in 2003 after Russian prosecutors indicted Mikhail Khodorkovsky.
In March 2005, Alexei Pichugin, the former chief of security for YUKOS, was sentenced to prison time for multiple counts of murder. Many oligarchs do face prosecution, but not because of their political beliefs; rather, they face punishment for actual crimes they have committed.
5 -- Brutality and human rights abuses run rampant in Chechnya
"Human Rights Watch says Russia resumed harsh campaign of torture, abductions and political killings in Chechnya ..." ("Russia Using Brutality to Suppress Chechens, Rights Group Says" by Barbara Crossette, The New York Times, February 28, 2002)
"... Amnesty said its field workers had discovered there was "no end to gross human rights violations" in Chechnya and Ingushetia. In a briefing paper published today, the group said its research implicated the Russian authorities "in the torture, abduction and secret detention of civilians." ("'No End' to Chechnya Rights Abuses, Says Amnesty" by Mark Oliver, The Guardian, September 30, 2005)
RB: When hundreds of Islamic militant groups in Chechnya were fighting the Russian army--which tried to restore Constitutional rule in this Russian region--casualties were tremendous on both sides, including among civilians. Although some representatives of the Federal forces displayed brutal behavior, the government did its best to punish such unlawful conduct. Colonel Yuri Budanov, who raped and murdered a Chechen woman, was publicly prosecuted, stripped of his rank, and is now serving time in prison. The trial was covered nationwide by all major media outlets. It is true that Chechnya has suffered more violence than Iraq--with beheadings, crucifixions and other torture inflicted by Islamic terrorists against peaceful citizens and young Russian soldiers.
Foreign journalists refuse to acknowledge, however, any improvements in Chechnya. In 2005, more than 7,000 fighters freely laid down their arms and took part in free elections, which were considered by international observers to be both smooth and successful. Russian army casualties dropped from 1,397 in 2000 to 28 in 2005. The Chechen government has been supportive of the Kremlin--and regional leaders are successfully enforcing the new Chechen constitution.
As a result, 250,000 refugees have returned home and established some 30,000 new businesses. Chechnya's new Prime Minister Ramzan Kadyrov, who is Muslim, enjoys an 85 percent approval rating and has promised to make Chechnya "the most peaceful and prosperous region in the world" in only two years. Just two years ago, the city was in ruins, but now, the largest mosque in the world is being built along with a five-star hotel in downtown Grozny. In 2006, an organization called Russian Ministries successfully ran several Christian summer camp sessions for Chechen children in Grozny. Despite these and many other positive strides, however, U.S. media continue to focus on the violence.
6 -- Kremlin supports Hamas, Iran and radical groups
"On March 3, Hamas envoys will arrive in Moscow. Their Russian hosts have prepared a banquet fit for a sultan. Gifts will be abundant. Russia's foreign minister Sergei Lavrov has offered to provide Hamas with foreign aid. There may even be shipments of everything from guns to helicopters." ("A Russian Ruse" by Ilya Bourtman, National Review, March 2, 2006)
"This is 100 percent, non-alloyed, near-perfect and totally bananas anti-Semitism--not the work of rational minds. It is, though, the work of the very people whom Putin ... would meet with. He would do so, apparently, without one word being changed in this repellent covenant--or without Hamas's renouncing its intention to obliterate Israel." ("A Disturbing Invitation" by Richard Cohen, The Washington Post, February 14, 2006)
RB: Not only has Putin never met with Hamas, but Russian Foreign Minister Sergey Lavrov made it clear that the group would be treated as an "undeveloped teenager" until it recognizes Israel. After Hamas representatives explicitly stated their unwillingness to make peace with Israel as they deplaned in Moscow, Putin deemed a meeting with the Palestinian leaders impossible. It is true that Hamas visited the Kremlin, but rather than meeting with the Russian president, the group joined Moscow tourists at museums and cathedrals. In effect, Russia's Foreign Ministry told Hamas to negotiate with the Israelis if the organization wanted to receive foreign approval.
Regarding construction of a nuclear power plant in Iran, Russia will penalize Iran if it chooses to misuse nuclear technologies. "If Iran expels the IAEA inspectors, we will immediately halt our work," said a high-ranking source in the Kremlin on September 8, 2006. And two days later, Putin stated that Iran "should abandon its plans for nuclear enrichment on its soil," and refused to rule out possible economic sanctions against Iran.
7 -- New NGO law assaults Russian civil society
"Critics counter that the Bill will destroy Russian civil society by severely curtailing NGOs' access to foreign funding from agencies such as the Department for International Development in Britain, USAID or the EU's Tacis." ("Putin crackdown to limit the power of foreign-funded NGOs" by Jeremy Page and Julian Evans, The UK Times, November 24, 2005)
"The leaders of Russia's nongovernmental sector have been predicting for more than a year that civil society would be next on President Vladimir Putin's crackdown on democracy. Now it seems as if their predictions are coming true with a vengeance." ("Putin's uncivil crackdown" by Lara Iglitzin, The Seattle Times, December 9, 2005)
RB: As in any other civilized country (including the U.S.), this Russian law requires registration of all NGOs and simplifies the registration process. It also restricts direct foreign financing of Russian NGOs; many of them have largely been involved in election campaigns and espionage. It also eliminates opportunities for advanced money laundering schemes. Hardly a country where philanthropy thrives, Russia is home to some 450,000 NGOs; it is hard to believe that all of them are devoted to legitimate business. Naturally, the media boils the issue down to the simplest of contradictions. Why are Americans so concerned with foreigners being able to donate to Russian non-profits? Isn't it time for Russians to learn how to put oil money to a legitimate use?
8 -- New "slander" law demonstrates Kremlin's authoritarian tendencies
"Russian President Vladimir Putin signed a law making slander of a public official a criminal offense ..." ("Putin Signs Law Against Slander of Public Officials" by Alan Cullison, The Wall Street Journal, July 29, 2006)
"A return of dictatorship in Russia, a country armed with thousands of nuclear weapons, would present a much greater threat than the current set of tyrants now threatening U.S. security." ("U.S. Ignores Putin's Assault on Rights" by Michael McFaul, Carnegie Endowment; Los Angeles Times, February 2, 2003)
RB: The Russian federal law--titled "On the Counteraction to the Extremist Activity"--aims to restrain radical and xenophobic organizations. Such groups are rising in popularity among Russian youths and have successfully organized several large fascist marches in 2005 and 2006. On August 21, 2006, three Russian students detonated a bomb in a Moscow public market, targeting ethnic minorities, killing 11 and injuring dozens. If there is a threat of totalitarianism in Russia, it is not a top-down problem, but rather a bottom-up one. Russians who dislike Putin often perceive him as too liberal and pro-Western.
The law does not target journalists. Instead, it seeks to punish those who have deliberately slandered government officials by falsely accusing them of involvement in extremism or terrorism--both of which are defined narrowly in the new law. The charge of slander would have to be proven in court. Many Western media outlets took the language of the bill out of its legal context, perpetuating an exaggerated perception of the Russian government as increasingly authoritarian. In our view, the potential acquisition of power by grassroots fascists in Russia presents the true threat to American national security.
9 -- Putin's policies constitute major human rights abuses in Russia
"The downgrading of Russia's status from "Partially Free" to "Not Free" by Freedom House was hardly accidental. The abolition of the governors' elections, other draconian changes to the electoral code, and the crackdown on NGOs are alarming signs of Russia's future direction." ("EU Soft on Moscow" by Evgeny Morozov, Brussels Journal, May 31, 2005)
"... [Putin is] the man who is doing more to stop the extension of freedom than anybody else ..." (William Safire, NBC's Meet the Press, February 27, 2005)
RB: Putin's policies are not the source of mass human rights abuse in Russia. The cause lies in a historically ineffective legal system and mass corruption at all levels of government. In 2004, when the annual federal budget was only $95 billion, cash bribes amounted to $316 billion. Putin's administration has focused on fighting the historic ineptitude of Russian bureaucracy--beginning with the changes in governors' elections and ending with attempts to restore order in the army. Many foreign journalists conveniently ignore such major human rights issues as the mass brutality in the Russian military and the fact that Russian sources account for 50 to 75 percent of the world's child pornography. Much of foreign funding directed at bashing the Kremlin's policies could have been better spent on exposing more pressing issues.
For example, a massive child sex ring was exposed in downtown Yekaterinburg in August 2006. The accused were caught selling young boys, renting them for sexual services and routinely raping them. When discovered, the victims numbered over 1,000 boys, ages 12 through 17; many of the boys were as young as 7 years old when the illicit business began in 2001. Yekaterinburg police have documented 116 cases of rape and sexual abuse. Such crimes are reported in great number every year throughout Russia. Unfortunately, foreign media and human rights groups all too often ignore the worst human rights abuses in Russia, preferring instead to concentrate on Putin's polices.
10 -- Russia is unsafe for U.S. investors
"Billionaire investor George Soros said OAO Rosneft, Russia's state oil company, shouldn't proceed with its initial public offering because it will legitimize the government's attempts to dominate global energy supplies." ("George Soros says Russia's OSA Rosneft IPO should not Proceed" , Bloomberg Financial Express, July 6, 2006)
RB: While George Soros assailed Russian IPOs in an attempt to scare off American investors, Russia established itself as the world's largest energy producer. And unlike some other oil-based economies, Russia doesn't use its oil profits to sponsor extremist groups.
The state-owned oil company Rosneft went 49 percent public in 2006. Russian private investors offered $750 million. In Europe, Germany's Dresdner Bank invested $300 million. The IPO was underwritten by Wall Street majors J.P. Morgan and Morgan Stanley. Besides a one-billion-dollar offer from British Petroleum in July 2006--and other offers by Malaysia's Petronas Bank and Petrobras (Brazil's state oil company)--China Daily reported that the China National Petroleum Corporation offered Rosneft $500 million. While real estate is booming in major Russian cities, the Chinese have secured construction projects worth $3 billion in Moscow and St. Petersburg. These investments trends suggest that Putin's new Russia can be trusted.
The first half of 2006 showed $23.41 billion foreign direct investment (FDI) into Russia (41.9 percent more than the same period of 2005); $499 million of this was directed into portfolio investments. Total foreign investment in Russia breaks down to 27.5 percent for direct investments, 2.1 percent for portfolio investments, and 70.4 percent for "other investments." While leading world economies are taking advantage of Russia's newfound stability and vast natural resources, America--preoccupied with politics--seems to be missing out.
This report was prepared by Discovery Institute Senior Fellow Yuri Mamchur, Director of The Real Russia Project. For more information on the Project or to find out how you can support it, please contact firstname.lastname@example.org or (206) 292-0401, ext. 151.