Ukraine must regain control over its borders

Russia shows no signs of even pretending to implement the key elements of Minsk 2. And why should they? As the Ukrainian journalist Vitaly Portnikov points out in this article, Putin knows that the people of the occupied Donbas grow more and more hostile towards the Russian occupants, and without their presence, the two artificial political constructions DPR and LPR will vanish in merely a few days. So Putin will keep his assassins in place for as long as he can.

The key factor in the Minsk agreement – and in Russia’s war in Ukraine – is to regain the control of the entire border. The West has not shown enough strength in this matter. What should be done is to let Russia understand that if they continue the aggression in Ukraine, the West must introduce military sanctions: that means giving Ukraine all the military resources they need to regain the control of its borders – weapons, military advisers and even air support. As soon as the border is under Ukrainian control, a wall must be built to last until a new regime is in place in Russia. Afterwards there can be free elections or a referendum, under strict international control, so that the population of Donbas can decide whether they want to be a part of Russia or not.

Unfortunately, the West does not possess such strength.

The best outcome would be if Putin was removed, and replaced with a figure who understands that if Russia continues on its aggressive path, the country will go bankrupt and the entire federation will dissolve into a large number of “ogurets republics”.

 

So now what, Lugandon?

As always it is hard to predict which will be the next step in the DPR/LNR/Novorossiya farce. It may appear that Russia, having started intensifying their warfare in Syria, is trying to tone down the conflict in Donbas.

Representatives of DPR/LPR have informed that they will postpone the planned “elections” until 2016. If the “elections” would have been held (the planned date was October 18), it would have been a big blow to the ceasefire process. There are also reports from Donetsk about lowering of Novorossiya flags, so is there finally a reason to raise some hope?

Well, not yet. The Russians have still a huge arsenal of heavy weapons in the zone, and few officers and special soldiers have gone home. It seems that the process of withdrawing weapons from the front line is going quite well, although OSCE has given disquieting reports of seeing a large number of Russian tanks outside Mariupol.

I can’t see why Putin should give up Donbas as his instrument in creating continuous problems for the West-oriented regime in Kyiv. He wants, of course, the West to lift the sanctions, but if he were to choose, being a torn in the eye of Ukraine would take the first spot. A full implementation of Minsk II means that paragraph 9 – giving back the control of the entire border to Kyiv – must be complied, and if so happens it will be a humiliating defeat for Putin and his gang of brothers. I don’t believe that will happen very soon.

The so-called insurgents, mainly local criminals fighting for the Russians, are now being painted into a corner: 1) they can’t go to Russia – the border is closed for them; 2) they know that they at some point will be confronted by Ukrainian authorities, including the army, and I highly doubt they will be met with any kind of goodwill. Ukraine will have to investigate all the war crimes, killings, torturing and atrocities committed by “separatists” during the last 18 months. So there is a substantial risk that these groups will continue to fight, and this time not for the midget in Kremlin, but for their own lives. If the Russians decide to leave or reduce their presence substantially, they will make sure to eliminate local key persons who may possess incriminating information about Russia’s role in the war.

The only certain thing is that it will take a long time and huge resources to clean up the mess which the Russians have made in the region. Hopefully the process can start soon, but chances for that are, in my opinion, quite small.

 

 

Feilaktig sparking av BarentsObservers redaktør

Mandag 28. september fikk redaktøren i BarentsObserver, Thomas Nilsen, sparken av styreleder Stig Olsen. Bakgrunnen var at det hadde bygget seg opp en konflikt mellom Nilsen, som mente at nettavisen skulle bli en del av Redaktørplakaten, og eierne, som mente at BarentsObserver kun skal være en informasjonsportal og ikke et selvstendig nyhetsmedium. Eierne er Finnmark, Troms og Nordland fylkeskommuner, mens UD betaler driften. UD gikk også i mai i år ut med støtte til redaksjonell uavhengighet for nettavisen. 

Den virkelige årsaken til oppsigelsen var at Nilsen og hans medarbeidere har skrevet stadig mer kritiske artikler om den uheldige utviklingen i Russland. Mange i Nord-Norge (og i Sør-Norge for den del), spesielt politikere på venstresiden og embedsmenn med sympatier på samme side, har helst sett at Norge toner ned kritikken mot Russland. Et klart eksempel på dette var uttalelsene fra den nye lederen for Barentssekretariatet, Pia Svensgaard, som i et intervju med iFinnmark i januar i år demonstrerte en urovekkende blanding av uvitenhet og grumsete holdninger.

Hovedargumentet har vært å opprettholde dialogen og kommunikasjonskanalene med vår stadig mer aggressive nabo i øst, slik at russerne ikke blir for provosert, og at så mye som mulig forblir ved det gamle. Denne ønsketenkningen er mye mer utbredt enn man skulle tro, og det er merkelig at så mange tilsynelatende oppegående folk svelger de grove propagandaløgnene som Kreml gulper opp daglig. Norge skal selvsagt opprettholde kanaler for dialog med Russland, men faktum er at vår nabo har okkupert store deler (44.000 km2) av et naboland. 8000 ukrainere er drept, hvorav 6000 sivile. Det er ikke «separatister» som står bak disse ugjerningene, av de ca 50.000 stridende på DPR/LPRs side er 65-75% russiske statsborgere – såkalte «frivillige» fra alle deler av Russland samt regulære russiske militærstyrker. Jeg ser overhodet ingen formildende omstendighet med å lefle med et regime som kun er et lite skritt unna å bli en fullblods totalitær stat.

Norske myndigheter har med rette stilt seg bak sanksjonene og restriksjonene som EU og USA har iverksatt, og man kan være enig eller uenig i dette, men det er nå en gang politikken som Norge har valgt. Stig Olsen, som åpenbart tilhører gruppen av venstrevridde embedsmenn som nevnt over, reiste personlig til Kirkenes fra Bodø for å gi Thomas Nilsen sparken. Det vil ganske raskt vise seg å være en tabbe som jeg håper får konsekvenser for styret i BarentsObserver. Jeg vil heller ikke utelukke at beslutningen er tatt etter påtrykk fra russisk side, som – vil jeg tro – har sett på BarentsObserver som en stein i skoen.

Er det en ting Barentsregionen trenger nå er det en sterk og uavhengig gruppe av journalister som kan gi et klarest mulig bilde av det som skjer på begge sidene av grensen. Helst ledet av Thomas Nilsen.

Who are fighting for DPR/LPR?

The Western press is still using the term “separatists” when it comes to describing the heavily armed forces of the so-called Donetsk and Luhansk Democratic Republics. One UK newspaper even reported about “Russian separatists in Eastern Ukraine”, which is an astonishingly absurd phrase to pronounce.

So who are they, the “separatist” forces of DPR/LPR? According to Dmitry Tymchuk, coordinator of the group Information Resistance, Ukraine’s enemy in Donbas consists of 50,000 soldiers. Approximately 55-60% of them are Russian “volunteers”, 10-15% are Russian regular soldiers and officers while 30-35% are locals.

The “volunteers” come from all over Russia. Many of them have been lured into going to Ukraine by the Russian TV Goebbels wannabes, Dmitry Kiselyov and Vladimir Solovyov, and most of them have a background from the army. Some are convicts who have made a deal with the Russian army. However, the management and supply has been provided by the Russian army. Before being sent to the battle fields, they are receiving basic training mainly in Rostov oblast.

This means that 65-75% of the “insurgents” (35,000-37,500) are Russian citizens. So calling this group separatists is wrong.

The locals are a strange mix of criminals, ex-military, hardcore nationalists and adventure seekers. In the beginning of the war, the DPR/LPR leaders recruited many drug addicts and alcoholics. The majority of those was used as cannon fodder. In a war situation it is often seen that low-life losers rise to prominence, as most of the DPR/LPR leaders are living examples of: Zakharchenko was an electrician, Givi (Mikhail Tolstykh) was working in a sling rope factory, Pushilin was selling ponzi schemes for MMM, Mozgovoy (killed May 23, 2015, probably by Russian GRU spetsnaz) worked as a cook in St Petersburg. Many local leaders have been eliminated and more will follow.

One must also have in mind that from the very beginning of the unrest in Donbas, Russian soldiers and officers not only were involved, but also were in charge of the takeover of the administration buildings in Donetsk, Slavyansk, Horlivka (here is a video showing the Russian officer Igor Bezler taking over the local police in April 2014), Luhansk and other cities.

During the next phase, when Russian got control of some border crossing points, a wide array of Russian soldiers were sent into Donbas: kadyrovtsy from Chechnya, South Ossetians, Dagestanis, Cossacks from Kuban, Buryats etc.

The third phase started in August, when it seemed that the Ukrainian forces were going to win. August 19, when the Ukrainians regained control over Ilovaisk, Putin ordered the Russian army to send 3,500 regular soldiers across the border. The Ukrainian forces were encircled, but they made an agreement with the enemy to allow them to retreat from the city. The agreement, favoured by Putin, was not honoured (as all agreements where that dwarf is involved) and more than 500 soldiers were massacred. At the same time Russian soldiers and weapons poured across the border, and the entire border zone from Uspenka to the Azov Sea was occupied in a few days.

Separatister jpeg

 

“Separatists” flowing in from all over Russia 

 

Minsk II: an absurdity comes to its end

Normandy_format_talks_in_Minsk_(February_2015)_03

The Normandy format members + host Lukashenko (the small guy looks like he needs to go to the bathroom)

The Minsk II agreement (and its predecessor the Minsk Protocol) is an absurd construction, which very soon will come to an end. It was a joke from the very beginning anyway (as predicted by Mark Galeotti in this article). 

What is absurd about the agreement? After all, it is still the only instrument which Western leaders rely upon. A few examples:

  • Nobody in the West has the guts to admit openly that this war is not an internal Ukrainian conflict, but a de facto invasion by Russia
  • The Minsk 2 was breached before the ink dried out: Russia special troops (and some locals) continued the heavy fighting to occupy Debaltseve. No protests from the West
  • Ukraine is negotiating with groups they label as terrorists
  • Russia may freely control a major part of the border, which of course makes it easier to send supplies, weapons and soldiers into Donbas
  • Poroshenko’s representative is Leonid Kuchma, the corrupt and pro-Russian former president (1994-2005)
  • Russia is a part of the Trilateral Group, even though they insist they have no part in the conflict
  • OSCE have access only to very limited areas in the occupied zone
  • The West is putting heavy pressure on Ukraine to fulfill their obligations, while DPR/LPR have openly claimed they intended to disregard the agreement from the beginning

The West has been desperate to use the Minsk II as a platform for further discussions, although anyone with some insight knows that this is useless. The Obama administration has shown no or little determination, and Merkel & Hollande appear as if they have received a direct threat from Putin: if you put more pressure on me I will attack Ukraine openly! Just too many politicians and not enough statesmen…

Russian forces have violated the ceasefire every day since the agreement was signed. The number of daily shellings from the DPR/LPR side vary between 25-150, and they use mainly heavy weapons prohibited in the agreement’s pt. 2 (see below). Except from release and exchange of some hostages (pt. 6), all of the agreements clauses are being violated.

Poroshenko is put under tough pressure from the West, and he has been forced to do stupid things like abandoning Shyrokyne, which is now being re-occupied by Russian troops.

Russia attacks during the night to make it difficult for OSCE observers to do their job. In Donetsk four of their cars were burnt on August 9. OSCE haven’t done much useful work anyway and must be replaced by an institution with much higher authority and power.

So what will happen next? Russia has poured heavy weapons into Donbas for quite a long time. 50,000 soldiers are lined up on the Russo-Ukrainian border, in addition to the 35,000-40,000 armed Russians inside Donbas. Ukraine forces have to respond to the endless shelling from the Russians, even though that means shooting at civilian areas, from where most of the shellings come from. There is a limit to how much pounding you can take, and soon – very soon – the time will come for a serious reaction.

*********

Here is the full text of the agreement. Read and weep:

1. Immediate and comprehensive ceasefire in certain areas of the Donetsk and Luhansk regions of Ukraine and its strict implementation as of 15 February 2015, 12am local time.

2. Withdrawal of all heavy weapons by both sides by equal distances in order to create a security zone of at least 50 km wide from each other for the artillery systems of caliber of 100 and more, a security zone of 70 km wide for MLRS and 140 km wide for MLRS ‘Tornado-S’, Uragan, Smerch and Tactical Missile Systems (Tochka, Tochka U):

for the Ukrainian troops: from the de facto line of contact;

for the armed formations from certain areas of the Donetsk and Luhansk regions of Ukraine: from the line of contact according to the Minsk Memorandum of Sept. 19th, 2014;

The withdrawal of the heavy weapons as specified above is to start on day 2 of the ceasefire at the latest and be completed within 14 days.

The process shall be facilitated by the OSCE and supported by the Trilateral Contact Group.

3. Ensure effective monitoring and verification of the ceasefire regime and the withdrawal of heavy weapons by the OSCE from day 1 of the withdrawal, using all technical equipment necessary, including satellites, drones, radar equipment, etc.

4. Launch a dialogue, on day 1 of the withdrawal, on modalities of local elections in accordance with Ukrainian legislation and the Law of Ukraine ‘On interim local self-government order in certain areas of the Donetsk and Luhansk regions’ as well as on the future regime of these areas based on this law.

Adopt promptly, by no later than 30 days after the date of signing of this document a Resolution of the Parliament of Ukraine specifying the area enjoying a special regime, under the Law of Ukraine ‘On interim self-government order in certain areas of the Donetsk and Luhansk regions’, based on the line of the Minsk Memorandum of September 19, 2014.

5. Ensure pardon and amnesty by enacting the law prohibiting the prosecution and punishment of persons in connection with the events that took place in certain areas of the Donetsk and Luhansk regions of Ukraine.

6. Ensure release and exchange of all hostages and unlawfully detained persons, based on the principle ‘all for all’. This process is to be finished on the day 5 after the withdrawal at the latest.

7. Ensure safe access, delivery, storage, and distribution of humanitarian assistance to those in need, on the basis of an international mechanism.

8. Definition of modalities of full resumption of socio-economic ties, including social transfers such as pension payments and other payments (incomes and revenues, timely payments of all utility bills, reinstating taxation within the legal framework of Ukraine).

To this end, Ukraine shall reinstate control of the segment of its banking system in the conflict-affected areas and possibly an international mechanism to facilitate such transfers shall be established.

9. Reinstatement of full control of the state border by the government of Ukraine throughout the conflict area, starting on day 1 after the local elections and ending after the comprehensive political settlement (local elections in certain areas of the Donetsk and Luhansk regions on the basis of the Law of Ukraine and constitutional reform) to be finalized by the end of 2015, provided that paragraph 11 has been implemented in consultation with and upon agreement by representatives of certain areas of the Donetsk and Luhansk regions in the framework of the Trilateral Contact Group.

10. Withdrawal of all foreign armed formations, military equipment, as well as mercenaries from the territory of Ukraine under monitoring of the OSCE. Disarmament of all illegal groups.

11. Carrying out constitutional reform in Ukraine with a new constitution entering into force by the end of 2015 providing for decentralization as a key element (including a reference to the specificities of certain areas in the Donetsk and Luhansk regions, agreed with the representatives of these areas), as well as adopting permanent legislation on the special status of certain areas of the Donetsk and Luhansk regions in line with measures as set out in the footnote until the end of 2015.1

12. Based on the Law of Ukraine ‘On interim local self-government order in certain areas of the Donetsk and Luhansk regions’, questions related to local elections will be discussed and agreed upon with representatives of certain areas of the Donetsk and Luhansk regions in the framework of the Trilateral Contact Group. Elections will be held in accordance with relevant OSCE standards and monitored by OSCE/ODIHR.

13. Intensify the work of the Trilateral Contact Group including through the establishment of working groups on the implementation of relevant aspects of the Minsk agreements. They will reflect the composition of the Trilateral Contact Group.

Putin and MH17: too big to fail

One year ago, at 16:20 July 17, 2014, the Malaysian Airlines flight MH17 was shot down by a BUK surface-to-air missile system. All the 298 persons on board died, 193 from the Netherlands, 43 from Malaysia, 27 from Australia, 12 from Indonesia, 10 from United Kingdom, 4 from Belgium, 4 from Germany, 3 from Philippines, 1 from Canada and 1 from New Zealand. 80 of the passengers were under 18 years old.

Malaysia_Airlines_Boeing_777-200ER_PER_Koch-2

This Malaysian Airlines Boeing 777 was the one shot down July 17, 2014

Of all the disastrous decisions Mr Putin has made since February 18, 2014, the order to shoot down a civilian plane in Ukraine was the biggest one. The evidence of Russia’s guilt is overwhelming, as these sources show: Ukraine@War BlogBellingcat, Daily Beast, RTLNieuws.

The Dutch Safety Board Commission will present its report in October. The first leaks, published by CNN, show that the MH17 was shot down by a BUK missile system operated by separatists close to Snizhne, a city which was – and still is – under their control. We will have to wait for the final report, but I believe that the conclusion will be as follows:

  • “Separatist” soldiers led by Igor Girkin conducted the operation
  • The target was supposed to be a Ukrainian An-26 military plane
  • Due to incomplete knowledge of the advance system, the separatist operators shot down the wrong plane
  • There will be no conclusion of the origin of the missile system, but “most likely” it was of Russian origin

Five countries, Netherlands, Malaysia, Belgium, Australia and Ukraine, have called for a tribunal to prosecute the persons suspected of the terrorist act. As could be expected, Russia is strongly against such a tribunal, and will do what they can to prevent the UNSC establishing such an instrument. If it will be established, Russia will veto any UN resolution and USA will not insist on transferring the voting to the UN General Assembly.

All the heat will be projected on the separatists in general, and Mr Girkin in particular. There will be an international demand of his extradition to the Netherlands, a request which Kremlin of course will turn down. Russia will probably propose to put Girkin before a Russian trial.

The two persons responsible for the terrorist act, Putin and defense minister Shoigu, will of course not be prosecuted. This topic is just too big to letting Putka lose face, and the members of the Dutch Commission have already been told to concentrate on the “separatists”. Russian diplomats may well have informed their Dutch colleagues that no spotlight in this case should be put on Kremlin. One of their arguments might have been that if any fingers are being pointed at Putin & Co, Russia will have to go to war. Not on Ukraine, but on selected EU countries. That seems reasonable. If an international tribunal digs deep enough and find clear evidence that the shooting down of MH17 was orchestrated and ordered by the very top in the Russian military (read: Putin as Commander-in Chief and Shoigu as Defense Minister), then Russia must be declared a terrorist state. Even some of today’s dubious allies of Russia will not be seen in such company. In such a situation the Kremlin power club will have nothing to lose, since all their bank accounts will be arrested, Russia will be cut off from the SWIFT system and its status will sink lower than the current pariah level.

Again, this case is just too big for letting the truth come to the surface. It is much easier to use the so-called “separatists” as scapegoats. As far as my own opinion concerns, I so far stick to the theory launched by the Ukrainian security service SBU.

 

 

 

Putin’s next move: Who cares?

Too many people are spending too much time and resources trying to “read” Putin and what may be his next move. This is a waste of time. Russia must be judged by what it’s doing, not by what it’s saying.

Western analysts, journalists,  governments and military experts should instead begin to treat Russia for what it is, or more correctly, for what it has become:

  • Russia is now a terrorist state: the evidence that Russian military personnel transported the BUK missile system from Russian side of the border and into Donbas, and then by a mistake shot down MH-17, is overwhelming. The real target was most probably Aeroflot’s SU-2074 (Moscow-Larnaca), which passed over Donbas at the same time. The plan was to shoot down the Russian plane full of tourists, then blame Ukraine in order to do a full-scale invasion (this invasion was set to July 18). An international publication of the fact that the shooting down of MH-17 was initiated and orchestrated by Kremlin is the one thing Putin fears most (except being poisoned by his peers). And he should. Even the most indifferent masses in West will open their eyes and demand action. Russia is also organizing terrorist acts in Ukraine, by blowing up railway tracks and setting off car bombs. And as long as no war is declared, every Russian soldier and volunteer on Ukrainian soil is by definition a terrorist.
  • Russia is a dangerous aggressor waging war on its neighbors. Western politicians, journalists and diplomats are afraid of threading big Russia on its toes, and are not yet ready to acknowledge the fact Russia’s military forces are fighting deep inside Ukraine, and have been doing so for over a year. This weak attitude has costed many Ukrainian lives, and has given Putin’s regime plenty of fuel to continue its aggressive line.
  • Russia’s menace to use nuclear weapons. This is Russia’s only trump card, and they have threatened to use them on several occasions. Russia also plan to deploy nuclear weapons in Crimea. This alone should be enough to kick Russia out of UN Security Council.
  • Russian diplomats and politicians are notorious liars. How do you approach liars? Avoid them. Or – if you have to socialize with them from time to time – give them no important information. Fortunately, EU and NATO have started to take steps in order to limit access for Russian diplomats to important arenas.
  • Russia is soon becoming a full-blown pseudo-Soviet fascist state. No free media and freedom of speech, killing opposition politicians, intensive militarization of the country swallows huge parts of the budget, dramatic increase in hatred against all foreign (especially American), people showing Ukrainian flags in public are thrown in jail, etc etc.

This is the reality we are facing. Western countries (Poland, Romania and Baltic states included) have to act accordingly and prepare for the next to worst: conventional military conflict (read: war) with Russia. We all know which is the worst case, and there is not much we can do about that.

The diplomatic efforts and sanctions have had very little effect, and both Minsk agreements are not worth the paper they were written on.

Even Putin himself doesn’t know what his next step will be, so the only recipe for the West is to act as if he plans for the worst. The bizarre warmongers in Russia media and the huge movements of troops and weapons to the Ukrainian border (and across it) show that Russia is ready for war.

 

How long will Putin stay in power? Blog from June 5, 2014

Here is an article from my previous blog. A small note at the end about the 2018 World Cup

June 5, 2014 / Leave a comment / Edit

Speaking at the Lubyanka—the Moscow headquarters building that the FSB inherited from the KGB—on “Security Organs Day” (known as “Chekist Day”) in December 1999, Putin said that “the mission of the group of FSB officers sent undercover to work in the government is being accomplished successfully” (A. Illarionov, 2008).

When Yeltsin’s “family” members were searching for the president’s successor they had not so much to choose from: Yevgeny Primakov, Sergey Stepashin and the young head of FSB, Vladimir Putin. All candidates were from KGB/FSB. Boris Berezovsky claims that he was the one choosing the unknown Putin, based on a previous meeting in St Petersburg, when the aide of Sobchak declined to take bribes. It didn’t take him long to regret his choice.

Since entering office Putin has built up an entourage of companions, whose main assets are loyalty and a similar way of thinking. This process hasn’t been only easy, but by the end of his second term most of the foundation was laid. Sergey Ivanov was one of the favourites to fill the role as “acting” president in the period 2008-2012, when Putin had planned to formally continue his presidency. It was therefore a surprise to many that the rather modest Dmitry Medvedev was chosen by Putin as his “successor” in Kremlin. Why so? Ivanov is a tough nut, and Putin wouldn’t risk having a president who could be a challenge to his position as the absolute leader.

Today the country is run by KGB/FSB. The new Politburo, or the Gentleman Club, is – of course – headed by Putin (KGB). Number 2 and 3 are Igor Sechin (KGB, Rosneft) and Sergey Ivanov (KGB, head of the president administration). On the next level we find Nikolay Patrushev (KGB, Security Council), Viktor Ivanov (KGB, anti-drug committee) and Sergey Shoigu (army general, Minister of defense). Ideology and media control is in the hands of Vladislav Surkov (GRU). Sergey Naryshkin (KGB, speaker) takes care of the State Duma, while Valentina Matviyenko runs the Federation Council (civilian, upper chamber). Lower in the system we find Dmitry Rogozin (civilian, deputy prime minister in charge of the military-industrial complex), Dmitry Kisilyov (director Rossiya Segodnya, chief propagandist), Dmitry Kozak (deputy prime minister). Sergey Glazyev (advisor ) and Igor Shuvalov (deputy prime minister) offer advice on economical questions. The guys from the infamous “Ozero” dacha cooperative, Yakunin (KGB, head of Russian railroads), Yury Kovalchuk (Bank Rossiya), the brothers Rotenberg and Gazprom’s Alexey Miller take care of the huge cash flow of the gentlemen’s club.

But where are Medvedev and Lavrov in this hierarchy? They are simply taking orders and not being involved in the policy making. I believe both feel pretty uncomfortable in their this entirely new situation.

In this hierarchy Putin is on top, but he depends entirely on the loyalty of his carefully selected companions. All the members are granted big funds from all sectors of Russian business, which strengthen the bonds between the club members. But it’s not so fun to have 500 million USD when you can’t spend some of it on your 200-feet yacht in St Tropez. Moscow has a lot to offer, but will soon turn boring. The conflict within the club will get tense in a short time, although it will be kept in the dark for a while.

When the time comes to remove Putin, the regime will continue to exist, but in a much more mellow form. The most probable candidate to take over is Sergey Ivanov. The process will be very difficult to keep secret, since Putin is quite paranoid.

So how long then will Putin stay in power? He will not attend the opening of the Football World Cup in Moscow in 2018, and he will definitely not see the finishing of the new bridge to Crimea. But then again, I don’t think anyone will see any of those events.

Why Russia’s economic future is grim

Oljepris

The oil price will hardly return to the $100+ level (Source: NASDAQ)

Deputy prime minister Shuvalov declared two weeks that the economic crisis in Russia is over. His main argument was that the drop in the GDP in Q1 was less than expected, -1,9% (while the estimate was at -2,6%). His statement was confirmed by his boss, Dmitry Medvedev. Some indicators have shown a positive development lately, like the strengthening of the ruble, the Central Bank’s reduction of the interest rate from 14% to 12,5% and the oil price which is increasing little by little.

Well, the economic perspective for Russia is in fact very grim, and the four main problems are the following:

  1. The domestic money sack is not getting bigger: Russian banks and companies have close to no access to Western money. Sanctions can’t be lifted as long as Russia continues its aggressive behaviour in Ukraine and towards most of its other neighbors, as former prime minister Primakov stated earlier this year. The lack of international funding makes it very difficult to keep existing businesses running, not to mention developing new business projects. When the pile of money is diminishing and the number of people wanting that money stays the same, we are at looking at some serious fighting ahead. Last week three more banks lost their licenses, and more will follow.
  2. The Russian Reserve Fund is getting smaller every day. Even the Finance Ministry admits that the heavy spending from the fund threatens to empty it in a period of 18 months. This year alone, $59 billions (of the fund’s total of $98 billion) will be spent. In the first quarter of 2015 Russia spent 9% of the GDP on the military! Big national companies are lining up to try to get a handout.
  3. Incompetent owners and top managers. The silovikis from KGB/FSB and other power structures have secured major stakes and top positions in the biggest companies. During the Soviet period the industry was run by incompetent party cadres, and the result was disastrous. The same thing is happening now – the main quality in a top manager is loyalty to the regime.
  4. Russian industry is heavily dependent on imported parts. Some may be substituted by domestic goods and import from countries which Russia continues to do business with, but some industries will suffer big time when they can’t import key parts from Europe, Japan and USA.

Russia’s self-inflicted isolation is already damaging to the country, and things will only get worse. In April, the processing industry production fell by 7,2%. The oil and gas sector is stable, but the car building industry has seen a drop by 22% in one year. Many plants have stopped the production temporarily. The food processing industry is also falling.

There are no short-term solutions. Russia must of course withdraw from Ukraine, but Putin and his entourage of hardliners don’t want to do that. They prefer to steal more money from the pensioners and the working people instead.

 

No change of regime after Putin is gone

Quite many Western analysts and media consumers believe that today’s regime in Russia stands and falls with Vladimir Putin. This perception is not correct, there will not be a change of regime after he has left the arena. This is a KGB/FSB regime, and Putin is only one of many players.

In the 1990s KGB/FSB had several attempts of taking over control in Russia. First in August 1991, when head of KGB Kryuchkov and his communist hardliner allies tried to overthrow Gorbachev in a highly unsuccessful coup d’état. The next time was before the 1996 presidential elections, when KGB/FSB was overrun by the oligarchs, who controlled the media and decided to support Yeltsin.

But finally, in 1999, Yeltsin and his “family” – headed by Boris Berezovsky – decided to secure a future immunity by installing an FSB successor. The list consisted of three candidates, all of them KGB/FSB: Sergey Stepashin, Evgeny Primakov and the unknown runner-up Vladimir Putin.

KGB/FSB thirsted for revenge, and when Berezovsky, who at that point made all important decisions on behalf of the “Family”, picked out Putin as his candidate (probably his biggest mistake in his life, except for taking a shower with a scarf around his neck), the KGB/FSB organizers in the background decided to throw in all resources to seize power. The strategy they chose was to start the Second Chechen war. By organizing a row of devastating “terrorist” attacks in Moscow, Buynaksk and Volgodonsk, Moscow started a brutal and devastating war in Chechnya, which killed between 25,000 and 50,000 Chechen civilians.

Since the end of the 1980’s, the KGB/FSB has cooperated with organized crime, and this cooperation has given the chekists valid competence in how to take over businesses (although the proficiency in running the same businesses is not at the same level). A few years after the takeover, all major companies and businesses were under the control of Kremlin.

An important part of the takeover strategy has been to give the other silovikis (leaders in the military forces and Ministry of Interior) a good slice of the pie. This reduces the possibility of heavy conflicts between the different power structures, since everyone is a part of the big kleptocracy project.

Having acquired such immense wealth and power, the ruling class will use all means to defend their positions. All signs of uprising and rebellion must be crushed at an early stage. If the discontent in some parts of the population should grow too strong, the Russian elite will not hesitate to use violence to keep the masses under control: dispersing crowds by simply shooting them down, mass arrests, reestablishing nightly arrests and prison camps in Siberia – no means are too cruel for these people.

After all, the KGB/FSB is nothing more than a organization with a very violent history, responsible of killing millions of people. But unlike the security police in other former dictator states, like Gestapo, Stasi and Securitate, KGB/FSB was never prohibited and disbanded – like it should have been in 1991 – it just was business as usual with only some small cosmetic changes. And now the Russian society is reaping the harvest of that huge historical mistake. And the blood will flow – again.

As long as this violent and corrupted regime will stay in power, Russia has no perspectives.