“Russia’s central bank governor has lifted the lid on $49 billion in illegal capital flight – more than half of which, he says, is controlled ‘by one well-organized group of individuals’ that he declined to name,” the FT’s Charles Clover reports:
Sergei Ignatiev…..unburdened himself in an interview with the Moscow newspaper Vedomosti about money leaving the country through the back door, which he said equaled 2.5 percent of gross domestic product last year. “This might be payment for supplies of narcotics…illegal imports…bribes and kickbacks for bureaucrats…and avoiding taxes,” he told the daily, which is part-owned by the Financial Times:
A Moscow-based economist, who asked not to be identified, said the schemes described by Mr. Ignatiev were exactly those being investigated now in several jurisdictions in connection with the case of the lawyer Sergei Magnitsky (above) who died in police custody in 2009 after he attempted to track a fraudulent tax refund that appeared to benefit a group of bankers and law enforcement officers.
“What Magnitsky was looking into – that was the tip of the iceberg,” the economist said.
Igor Yurgens, a former adviser to Dmitry Medvedev, the prime minister, said that if what Mr. Ignatiev said about a “single organized group” was true, “such an operation would not be possible without serious support from law enforcement”.
The revelation follows news that Vladimir Pekhtin, a vehemently anti-American member of the United Russia ruling party, resigned from the Duma this week following revelations that he failed to disclose properties he owns in Florida.
“Is corruption in Russia’s DNA?”, the subject of an exhibition by photographer Misha Friedman, appears to be a legitimate question to ask.
But analysts caution against indulging in stereotypes.
Former U.S. President George W. Bush famously asked “whether or not it’s possible to reprogram the kind of basic Russian DNA, which is a centralized authority.”
But Adam Michnik, a leading founder of the Solidarity movement, dismissed the notion of authoritarian DNA . Russia has a variety of traditions, including a liberal democratic tradition going back at least to Alexander Herzen, he said, rejecting the “point of view among Western and American cynics and opportunists that we don’t need to do anything, because Russians like dictatorship.”
First is how Putinism so frequently gets a pass in the West. The United States has pursued the last four years a policy intended to ‘re-set’ relations with Moscow, a kind of constructive engagement with the Kremlin. That policy has failed. The EU’s Moscow strategy has been equally feeble. Putin’s apologists in the West often insist that Russian culture is not conducive to Western democracy; so why fuss and fret? Of course, culture matters. After 70 years of Soviet Communism, no one thought this transition would be easy.
But we’ve been here before. Democracy was once said to be impossible in places like Spain and Portugal (and Latin America) because of Catholic authoritarian traditions. …. If Russians don’t care about democracy, why does Putin spend so much time and energy curbing and quelling dissent?
The second striking thing about developments in Russia is how much Putin and his allies have learned about the art of repression. ….. There are softer, more sophisticated forms of intimidation and misdirection these days. Take media. Martha Bayles of Boston College writes of the “manipulations of cynical 21st-century authoritarians like Vladimir Putin, who use a free flow of infotainment to keep the masses amused and distracted, while crushing any political speech that might threaten his power.” RTWT
But some commentators appear willing to sacrifice Russians’ democratic aspirations on the altar of Realpolitik in the interests of engagement.
Engaging an authoritarian regime like Putin’s “raises a classic foreign-policy dilemma, where U.S. interests and values are in conflict,” writes the Washington Post’s David Ignatius.
Nevertheless, he concludes, “the benefits of a more cooperative U.S.-Russian relationship — on Syria, Iran, North Korea, arms control and other issues — are so substantial that they are worth the cost. That’s a heavy burden, especially since it’s likely to be borne by Russian human-rights activists.”
If the US and Russia are to reset the reset, says the Carnegie Endowment’s Matthew Rojansky, engagement should at least be extended beyond the intergovernmental sphere to civil society.
“Above all, ordinary Russians and Americans need more opportunities for engagement, not fewer,” he contends:
After a decade of strong economic growth, Russians themselves can now afford to engage as never before. But the Kremlin must resist the temptation to monitor and control every interaction. Rather than imposing visa bans, Russia should offer streamlined visa-free entry to US and EU citizens, even if western governments are too stodgy to return the favor. Ordinary people – students, tourists, and entrepreneurs – could come in droves, and while Russia would enjoy huge economic benefits, the exponential growth in international dialogue would have an even more transformative effect on political relations.
But that’s easier said than done when the Kremlin is not only manifestly hostile to pluralism and independent civil society, but also cultivating the most virulent anti-American sentiment seen since the height of the Cold War.
Russian democrats aren’t advocating isolation, an end to trade or a stop to negotiating nuclear weapons, writes Lilia Shevtsova, Rojansky’s Carnegie colleague.
“The opposition and the liberal critics of the West do not expect Western governments to fight for Russian democracy and freedom; this is an agenda for Russians,” she wrote this week in a must-read analysis. “But in pursuing trade or security relations, nothing is forcing Western governments to play the game ‘Let’s Pretend’ with regard to the path the Kremlin has taken.”