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Rabkor editorial: Economic sanctions have Russia seeking compromise with West over Ukraine

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​Who will remove the head of Russian President Putin and offer it on a platter to the U.S.?

Editorial, by Vasily Koltashov and Boris Kagarlitsky, in Rabkor (Worker Correspondent), Oct 10, 2014, translated from the original Russian by Gaither Stewart

It seems that Russian authorities have found a way towards accommodation with the West. Liberals have become more powerful and are leading the talks.[1] They are ready to make concessions and see no problem in the sacrifice of Novorossiya, and, if necessary, even Russia’s own interests. There’s just one remaining question: who will remove the Russian president’s head and present it on a platter to the USA?

Negotiations between Russia and the West about ending the “sanctions war” and resolving the crisis in Ukraine are moving full speed ahead. This was spoken of in October at the G20 finance ministers’ talks in the USA. The Russian Foreign Minister Sergey Lavrov discussed the subject with Secretary of State John Kerry. The Ukrainian question will be a major subject for many participants at the G20 summit in Australia next month. Although Russian authorities deny they will ask for revocation of the sanctions, talks are underway about this issue. It was precisely for this that Moscow began the dialogue with the West, reduced its criticism of the Kiev regime, allowed the latter’s military forces time to regroup by agreeing to the Minsk ceasefire and blocked delivery of ammunition to Novorossiya. And also obliged dependent Donetsk political leaders to accept compromising decisions smacking of one-sided capitulation. Field commanders and the people of the Donbass will never accept these conditions, but the Russian elite is not yet aware of this since it has a poor understanding of what “the people” really amounts to. 

Already in August, the EU ambassador in Moscow remarked that the sanctions could be revoked. The Minsk talks showed that Russian authorities had begun bargaining with their Western partners and were ready for concessions. Moscow’s goodwill was expressed in its reductions of supplies of weapons to Novorossiya, a purging within its political leadership and a distancing from its military leaders. Moscow is playing no small part in the weakening of the defensive capabilities of the territories in revolt. If talks with the West proceed successfully, then the Russian leadership will “concede”: it will permit troops of the Kiev government to begin a new attack, leaving the struggling Novorossiya without support.

The presidential administration and government of Russia are working in agreement, without obvious contradictions. Everything points to a new strengthening of the liberal camp within the regime, and to the acceptance by Vladmir Putin of the liberals’ overall  plan. And the blame lies with the economic situation, the markets, financial problems and the fears of the elites.

This autumn, world oil prices sank unexpectedly sharply. By mid-October, the price of a barrel of “black gold” fell to US $85. Russia’s economic situation worsened swiftly, but no one in the government intends changing course. Although, in effect, precisely that course - long before the economic sanctions pushed Russia to its own economic sanctions - is the fundamental reason for the current difficulties. The governing circles count on the world market and refuse to develop the internal market, which would mean the search for a social compromise (concessions to workers). The reduction of imports in favor of domestic production and a radical change of personnel remain simply topics for conversation. The real work of the government is directed toward conciliation with the West in order to maintain the neoliberal course.

Sanctions imposed by the USA, EU and other governments have proven to be effective. But this is not what undermined our economy, it was, rather, the fear by our elites. Sanctions showed Russia’s governing class its financial vulnerability. Still, precisely the fall in raw material prices on the global market was the signal for the elite that further exchange of sanctions was dangerous. The restriction of deliveries of Russian goods to the European market will contradict WTO regulations. But the introduction of such sanctions is very possible in conditions of a fall in demand and a growth of competition. The USA permitted Iranian hydrocarbons to [be shipped to] Europe, and Moscow lowered its tone. It is surrendering its positions and intends bargaining for stability instead. But if the state builds its economic policy on the export of raw materials, it will never be either independent or a really powerful player in international politics.

However much we are told of “Russian imperialism”, contemporary Russia is above all a dependent, peripheral country, whose ruling class does not wish to carry out a transformation which would permit genuine independence and influence in the world. Such transformations would inevitably hurt the interests of the contemporary elite, or at least the interests of an important part of it.

The Russian authorities have already made clear to the USA and the EU that they reject any possibility of the popular uprising in eastern Ukraine being victorious throughout the whole of the country. They have blockaded it on the territories occupied by the popular militias. Throughout the summer, the Kremlin’s chief political advisor, Vladislav Surkov, worked to defuse the rebellious Donbass. But providing aid to the Kiev regime and subsequent agreement with the West did not succeed. The other side did not accept the counter-plan. In Moscow, they decided that they faced two problems: the excessively principled “Colorados” [Ukrainian slang for the Donbass fighters] and the USA. Within the government, the supporters of the struggle gradually grew weaker. Putin designed an internal compromise whose essence is negotiations and concessions in order to normalize relations with the West.

Sacrificing Novorossiya, relying on European ruling circles and appeasing the USA—such is the current plan of the domestic elites in order to end the conflict. They understand this very well in Brussels and Washington and enter step by step into the negotiation game with Moscow. But while the Russian ruling class strives only to defend its positions and assets in the West, North American and European capital needs to make gains at Russia’s expense. This includes not only the full occupation of Ukraine( whilst allowing the formal retention of Crimea by Moscow) but also access to the Russian market, its assets and its raw material resources.

The USA and the EU know that strong governments in Russia are the product of the growth of powerful business and its organization. The presence of a strong guardian and government in the figure of the present state permitted the corporations to more effectively compete and develop. Thus, sanctions are intended to divide Russian capital while talks and concessions weaken the state apparatus that obstructs the ability of the West to agitate among the population for regime change. A long process of bargaining between Moscow and its partners should strengthen even more the positions of the liberal bureaucrats. They are likely to achieve greater importance in the eyes of big business. Then the West will pose the question of removing the arbiter of Russian politics, Vladimir Putin, discredited in the eyes of the “civilized world”.

The West demands Putin’s head without fail. It is not only a question of the reputation of Western politicians who have branded the Russian President and need to complete the plot of the latest victory over the latest dictator, as has happened earlier. The question of power in Russia also has a practical significance. That is not exactly the way the liberal press describes it. In no way does Putin resemble a lone ruler, making wild decisions. On the contrary, his power is based on compromise, the balance of forces and the building of collective government of the country, for an oligarchic regime by its very nature is incompatible with personal power.

But it is precisely Putin’s moderation and his ability to maintain a balance within the elites, to satisfy and tranquillize each, to listen to all and try to respect all interests supporting his leading role, the basis of his “stability”, has become his major weakness.

For the US and the EU, it is not only important to stop the process of post-Soviet integration that Moscow has initiated, or to block Russia’s territorial, commercial and industrial rebirth. Also vital to the West is to destroy the system of compromises among the major business groups linked to Putin. According to the US and EU, partisans of the “Russian world” and import replacement should no longer be heeded. Power’s rhetoric must be purged of such dangerous subjects. The regime in Russia must become more liberal and openly pro-western, and its economics firmly peripheral.

Such is the plan of the liberal revolution. Putin does not have any “cunning plan” with which to counterbalance it and offset the moves by the West. Nor is there planned any “radical change of personnel by the President”. A radical change of personnel cannot be executed while leaving all the key figures in their places and strengthening the positions of those players who are obviously opposed to the official line.

An old Russian fairy tale about evil boyars[2] surrounding a good Tsar makes more sense today than during the times of the feudal monarchy. For in fact, the Tsar could not nominate his boyars, who inherited their posts. But in a republic, even in such a strange country resembling Tsardom as in our country, the President nominates and confirms the functionaries. That, however, does not mean that “the republican Tsar” does not have problems with his boyars. It is an enormous problem. For Putin, it is simply impossible to gather a cohesive, loyal and capable team, which confirms that his power is far from being that of a Tsar. 

For all that, there is a liberal plot against Putin and the system of power formed around him. And the great misfortune is that, apparently, Putin himself is a participant in it. By refusing to correct the economic policy of 2012-2014, he created the conditions for the development of the “second wave” of the crisis in Russia. The Cabinet of Dmitry Medvedev and the Central Bank headed by Elvira Nabiulina opened the door to the economic slump long before the fall of world petroleum prices. They consolidated still more the peripheral, raw material character of the domestic economy, making it vulnerable to the sanctions by the USA and its partners, and then began making concessions.

The West intends to play a power game in the long negotiations with Moscow. It can apply zeal and rigidity and therefore events will not go exactly as planned. The same happened in Ukraine. However, the USA and the EU understand that Russian liberals are now stronger and will stubbornly search for compromise. Dmitry Medvedev has already declared that a “rebooting of relations” demands a return to “default positions”, that is, to normal trade without sanctions. For the sake of that, the ruling class will go for anything, especially if the situation is complicated by economic factors. If a resolution of the issue with Western Europe and the USA requires the presenting of Putin’s head, that is how the issue will be resolved.

But Russia is not a banana republic or a small East European country, where one can simply organize a color revolution, gathering several thousand activists of “civil society” on one of the central squares. Only Putin himself can remove Putin’s head for the USA - and by no means only through carelessness.

Russian “patriots” dream stubbornly of convincing today’s President to imitate Stalin or Ivan The Terrible. The liberal intelligentsias frighten each other and the credulous western public with this idea. And meanwhile, our government each day comes to resemble an entirely different predecessor--Mikhail Gorbachev, also, by the way, a politician who put his stake on compromise.

The maturing prospect of a liberal State Emergency Committee[3] becomes each day more evident. Meanwhile, before the final act, the matter is not yet decided but the drama has already begun. Liberals are carrying out the ritual sacrifice of the victims. They sacrifice the ruble exchange rate and social policies. They sacrifice Novorossiya. They sacrifice the dignity of the country. They sacrifice the possibilities for the development of Russian society. They are even ready to sacrifice that which has protected the system for many years. Still, all that will bear no fruit because only a different course can save Russia from an economic catastrophe.

And let no one be fooled: if the liberal revolution becomes a reality, its authors will quickly learn how correct the thesis “Ukraine is not Russia” really is. Unlike the neighboring country, Russia, with the exception of its capital, will be transformed into one entire Donbass.

Vasily Koltashov is Head of the Centre for Economic Research at the Moscow-based Institute of Globalisation and Social Movements (IGSO). Boris Kagarlitsky is the Director of IGSO.

[1] “Liberals” in the Russian context should be understood as sharing the views of right-wing neo-liberals in the West. Traditionally, the heroes of Russian liberals have included Thatcher, Reagan and improbably, Pinochet. A tiny, isolated current in Russian society generally, liberals have influence in big-business circles and represent an important contending faction within the Putin administration.

[2] The boyars were powerful noblemen who contended for power with medieval Russian tsars. Their influence was finally crushed by Tsar Peter II early in the eighteenth century.

[3] The reference is to the State Committee on the State of Emergency, which was formed by hard-line Communist Party leaders and state officials and which vied briefly for power during the failed coup against Mikhail Gorbachev in August 1991.

See also: New York Times and Human Rights Watch: Ukraine using cluster bombs in its war in the east, by Roger Annis, Oct 22, 2014


Russia is trying to end sanctions and save face

By Vladimir Frolov, The Moscow Times, Oct. 27 2014

The Kremlin is currently engaged in a delicate diplomatic dance to get Western sanctions lifted without creating an appearance of ever asking for it. It is driven both by despair over the mounting economic costs from sanctions and the desire to maintain Putin's skyrocketing approval ratings, now largely fueled by the confrontation with the West...

The plan is to create arrangements that would allow Moscow to claim it had not traded its strategic interests but persuaded the West to treat Russia as a geopolitical equal and recognize the error of "self-defeating" sanctions.

President Vladimir Putin is keen on not repeating the fatal blunders of former leaders Mikhail Gorbachev and Boris Yeltsin, who allowed their relations with the West to be perceived as a humiliating sequence of unilateral concessions made by Russia...

Full article at the weblink.

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