After reading for weeks about the "former FSB agent Aleksandr Litvinenko" in the Russian media, and an "ex-KGB spy Alexander Litvinenko" in the English language media, one can't help but wonder if Litvinenko was really a "spy". The FSB, the former employer of Litvinenko, is one of the descendants of the KGB. The KGB dealt with both intelligence (or spying) and counterintelligence (catching foreign spies, as well as suppressing dissidents). After the breakup of the Soviet Union, the KGB was split up into several agencies. The intelligence functions (spying) went to the SVR (External Intelligence Service), and counterintelligence, as well as fighting against organized crime, something that wasn't as necessary in the Soviet times, went to what is now known as the FSB (Federal Security Service). This former employer of Litvinenko operates inside the country and is not known to engage in what is commonly understood by the term "espionage" -- that's reserved for the SVR (GRU as well, but that has nothing to do with the former KGB). Therefore, referring to Litvinenko as an "ex-spy" basically misrepresents the work that he did in the Russian special services.
That's what I thought. However, after I cast doubt on the applicability of the term to our ex-FSB agent, a certain commenter proposed to teach me English and proceeded to rant at length, for starters pointing out that the word "spy" means "to watch secretly usually for hostile purposes, to search or look for intensively" [link and definition as provided by the commenter]. Let's forget for a moment that this would be teacher of English confused the verb "to spy" with the noun "spy". Because it gets more interesting. While admitting that the media does not claim that Litvinenko engaged in international espionage against foreign governments, the commenter decided to defend the "spy" label by pointing to examples of industrial espionage, and also claiming that since Litvinenko's work for the KGB involved spying on people, then he was definitely a "spy". And of course, since the KGB was such a secretive organization, how dare I presume to know what Litvinenko did there. Apparently, the irony of this accusation was lost on the commenter, who keeps claiming that Litvinenko was in fact a spy -- I guess the KGB must've been more secretive with me than with her.
So what does the common description of Litvinenko as an "ex-spy" imply about his line of work? That he was a foreign intelligence agent, or at least dealt with such agents, or that he simply "spied" on people? There can really be no two answers about it. The job of "spying" on people is performed by many professions, for example, by police, who gather intelligence on criminals. And even nosy people who pry into their neighbors' lives can be described to be spying. However, no one in their right mind ever refers to policemen or busybodies as "spies" without providing additional context. A description of someone simply as a spy, outside of any context, implies that the person is professionally employed as a spy, and the meaning of "spy" in this case becomes "a person employed by a government to obtain secret information or intelligence about another, usually hostile, country, esp. with reference to military or naval affairs." This is exactly what all the newspaper headlines implied about Litvinenko. This is exactly how it's been construed by the readers.
So who was Litvinenko, really? According to his own widely cited claims (usually lifted verbatim from his book "The FSB Blows up Russia"), he served in the army from 1980 to 1988, when he transferred to the KGB counterintelligence. After the KGB was split up, he ended up in what is now known as the FSB, in a unit specializing in fighting terrorism and organized crime. That's where he received an honorary badge "MUR Veteran" ("MUR" stands for Moscow Criminal Investigation Office). In 1997 he was transferred into allegedly "the most secret unit of the FSB RF" -- Directorate for the Investigation of Criminal Organizations. Such was his alleged history of employment until the famous press conference, where it all went downhill. The story from other sources is a little murkier. The current Defense Minister Ivanov, who also used to be an FSB officer, recalled that Litvinenko came to the FSB from the Interior Ministry's convoy troops -- that is, he had been a glorified prison guard. The KGB connection becomes unclear. His FSB career until 1997 also seems somewhat questionable. The unit he refers to was probably a joint task force set up by the FSB and the Interior Ministry to combat organized crime. Litvinenko himself most likely remained an Interior Ministry employee (that is, a policeman), since otherwise there is no explanation for him being dubbed a "MUR Veteran". FSB officers can hardly be described as veterans of simple criminal police of the Interior Ministry. His official recruitment to the FSB most likely occurred only in 1997, when he became Berezovsky's man. Be it as it may, his career in the special services apparently consisted of guarding prisoners and combating organized crime, as well as stints in Chechnya. None of these activities have any resemblance to espionage implied in newspaper headlines.
So while western newspapers attempt to sell more issues by marketing Litvinenko as a spy straight out of a Cold War spy drama, this causes problems to arise for Litvinenko's friends and family. That's because if he were a spy, he becomes a traitor in the traditions of the Cold War, which can be used to discredit his claims in Russia, and in the West this brings up the terrifying caricature images of the KGB and Litvinenko's possible role in it. Litvinenko's circle was immediately forced to defend him from these allegations. For example, a friend of his, one David Kudykov, complained bitterly on a Chechen separatist propaganda site: "The press calls Sasha [Litvinenko] a spy, and this puts a stain on him, that he worked for the kgb [sic]. But Sasha was an officer fighting against organized crime there, it was his official position, which had absolutely nothing to do with espionage." Litvinenko's wife Marina further commented in an interview with The Sunday Times that "she had decided to speak out after becoming angry at 'completely untrue' reports suggesting her husband was a man of dubious character. She said he had been an honest man, a crime fighter rather than a spy."
Since Litvinenko clearly wasn't a spy, all this talk about "ex-KGB spy" was simply a form of falsification. Was it done deliberately to sell more issues by calling up the mystique of a Cold War spy drama, or was it the result of incompetent journalists hearing the word "KGB" and immediately thinking "spies"? Probably a little of both. Frankly, I don't see this as such a big deal. It was really a harmless lie, even if it frustrated Litvinenko's wife. But I decided this needed to be investigated anyway, just to set the record straight.
Finally, since this is supposed to be a media review blog, not a ranting commenter review blog, let's start naming names of some of the incompetent hacks employed by various newspapers and news agencies, who for some reason thought that Litvinenko had been a spy. After searching through JRL archives, here's a very incomplete list for 2007 only:
Tony Halpin, The Times, 17 Jan
Daniel McGrory, The Times, 17 Jan
Josh Grossberg, Eonline.com, 16 Jan
D'Arcy Doran, Associated Press, 13 Jan
The aforementioned Alexandra Poolos, ABC News, 10 Jan
Phil Stewart, Reuters, 5 Jan
Andrew Osbron, The Independent, 4 Jan
Karen Kaplan, LA Times, 1 Jan
Thomas H. Maugh II, LA Times, 1 Jan
And an honorable mention goes to the commenter who attempted to prove that Litvinenko can be called a spy by implying that, since we don't know what the KGB was doing, he just might've been one.
Note: If anyone has more information on Litvinenko's background with the special services, and the work he performed there, please share it.
Thursday, January 18, 2007
Saturday, January 13, 2007
The "Empire of Lies" Strikes Back
A certain Alexandra Poolos from ABC News came out with a stark indictment of the Russian media, which she titled "Russian Media Called 'Empire of Lies'". The meaning of the strange title is clear to anyone who reads enough of similar exposes, such as the unfortunate yours truly: It simply means that Alexandra Poolos really-really wanted to start calling Russian media names, but since she also really-really needed to appear "objective", she had to search long and hard to find someone willing to do that for her. And she did, which she immediately put in the title of her piece. This isn't her own opinion. Really-really.
For starters, the credulous reader will find out that, apparently, "while the world buzzes with disbelief and fascination over the poisoning and death of a Russian ex-spy, the story has captured scant attention in Russia." Of course, the overly truthful Alexandra Poolos, the great exposer of liars, probably doesn't even realize that Litvinenko was never a spy, and this label she applies to him actually makes her out to be a liar. But let's give the poor soul the benefit of the doubt and assume this was the result of simple incompetence, rather than an attempt to deceive. Instead, let's find out the extent of the "scant attention" captured by this story in Russia. Really, it's not a complicated exercise. For print media, there is a very convenient web site called SMI.ru, which indexes a large chunk of Russian newspapers and other periodicals, including all the mainstream ones. Searching for "Litvinenko" produces over 800 articles in the past month and a half (931 total hits), including ones in the government-owned "Rossiiskaia Gazeta". Such scant attention, really, only some 15-20 articles every single day, even if you discount for false hits. Not being satisfied with that, I proceeded to call upon Russians in a couple of Internet forums, as well as contact my acquaintances by email and IM, asking them whether there was much about Litvinenko in the news on TV, including the government channels. All replies indicated that indeed, the Litvinenko affair was mentioned "on all main channels in the news, on multiple occasions". Some even solicitously asked if I was right in the head to even be asking questions with such obvious answers. Well, I'll have to readdress this concern to Alexandra Poolos, on whose behalf I'm doing this. One great recommendation was to check the news archives (with the actual footage of the news programs) of the government-controlled Channel One. Searching in their archives for "Litvinenko", I found out that the story appeared 42 times in their news between 1 November 2006 and 13 January 2007. On some days, such as December 1, among others, it was the very first and the most important news item in the broadcast. Video clips of the broadcasts can be easily viewed on the same site. Scant attention, indeed. And this claim wasn't even hard to verify -- all you needed was an Internet connection and a desire to be honest. Clearly, Alexandra Poolos lacks one of these, and something tells me it's not a problem with her Internet connection.
Our fearless exposer of lies and liars, Alexandra Poolos, further maintains that if you "ask any seemingly cosmopolitan Russians on a downtown Moscow street about their take on the international scandal, [...] they will most likely shrug and suggest that the former spy Alexander Litvinenko poisoned himself just to make Russian President Vladimir Putin look bad." Well, from this I can only assume that Alexandra Poolos never actually bothered to "ask any seemingly cosmopolitan Russians" anything of that nature. Because the polling agencies, those who actually ask such questions as part of their job, came up with somewhat different results. For example, the independent Levada Center conducted a poll between December 8-12 and found that 20% of Russians believe Litvinenko was killed by his former business partners, 15% -- by Boris Berezovsky, 10% -- by Russian special services, 8% -- by western special services, 8% -- he accidentally got poisoned while smuggling radioactive materials, 1% believe it was a suicide. The same poll also asked why Litvinenko was killed. Only 19% of Russians believe it was done to make Russia (14%) or Putin (5%) look bad. Other theories included revenge for something Litvinenko did (15%), due to dangerous information he possessed (14%), in order to create a political emergency in Russia to enable Putin to run for the third term (4%). Thus, Alexandra Poolos's alleged "most likely" replies are possible only from the 9% of respondents who believe Litvinenko killed himself, and the 19% of respondents who believe it was done to damage Russia or Putin. And these two sets don't even necessarily intersect, which would make the number of people who espouse the "most likely" view rather tiny.
It is obvious from the above that Alexandra Poolos believes these "seemingly cosmopolitan Russians" are deceived just because their opinion does not correspond to the one true opinion espoused by our fearless exposer of lying empires, which no doubt is that Putin personally did it, or if not, then it was the KGB on the orders of Putin, or if not, then it was the KGB without the orders of Putin, who is obviously a weak ruler, or if not, it was still Putin's fault somehow. But what are the opinions based on right now? Due to the obvious failure of the Scotland Yard to identify a motive for Litvinenko's murder, the only opinions possible are based on the simple principle of "qui prodest?" -- or "who profits?" -- and nothing else. Seeing how much Russia and Putin actually managed to profit from the affair, only one logical conclusion can be reached. And the fact that it differs for Russians compared to one Alexandra Poolos, it simply means that your average Russian is more intelligent, more logical, and more honest that your average Alexandra Poolos.
After that, we find out about Alexandra Poolos's source for the bizarre allegations above. A certain Jazz Ayvazyan went to London "a week after the story broke in early November." Well, I hate to rain on your parade once again, dear Alexandra Poolos and Jazz Ayvazyan, but the Litvinenko story did not break in early November. Litvinenko was allegedly poisoned on November 1. But there was nothing in the mainstream British media about the story until November 18, when it was claimed that Litvinenko had been poisoned with thallium (which later turned out to be completely false). No surprise there, since Berezovsky, who orchestrated the coverage of the Litvinenko affair, needed some time to retain the services of Tim Bell's PR agency. In contrast to the western media, who needed the Berezovsky PR money to start them rolling on the coverage, the Russian media was already reporting on Litvinenko's poisoning on November 11. As well as the statement from the London police that they know absolutely nothing about Litvinenko's poisoning on November 13. Thus, if you wanted to know anything about Litvinenko before November 18, you had to be in Moscow, not in London. Or at least have Internet access. Of course, further in the article our Jazz Ayvazyan confesses that he had "stopped watching Russian channels and replaced them with Discovery kind of entertainment". No wonder Jazz Ayvazyan doesn't know anything about the Litvinenko affair! After all, the Discovery Channel is the true "empire of lies". Can you imagine, the liars haven't said anything about Litvinenko?!! Good job, Alexandra Poolos, on exposing your own sources as incompetent and/or deceitful. Now I am starting to believe that you are truly out to set all liars straight.
Unfortunately, I should wrap up here, even though there is much to be said about every single claim in the article of the ever honest Alexandra Poolos. However, unlike the brave reporter being reviewed, I'm not paid for this. And since I am taking care to research and verify what I write with facts, I work somewhat slower than your average Alexandra Poolos, who I'm sure can fantasize much faster than I can do research, so she can proceed to the next topic, where she can expose another bunch of dastardly liars. Let's just hope that those "liars" don't decide to verify Alexandra Poolos's claims, like I just did. Because who knows, maybe they will not be as mild-mannered and soft-spoken as I am.
For starters, the credulous reader will find out that, apparently, "while the world buzzes with disbelief and fascination over the poisoning and death of a Russian ex-spy, the story has captured scant attention in Russia." Of course, the overly truthful Alexandra Poolos, the great exposer of liars, probably doesn't even realize that Litvinenko was never a spy, and this label she applies to him actually makes her out to be a liar. But let's give the poor soul the benefit of the doubt and assume this was the result of simple incompetence, rather than an attempt to deceive. Instead, let's find out the extent of the "scant attention" captured by this story in Russia. Really, it's not a complicated exercise. For print media, there is a very convenient web site called SMI.ru, which indexes a large chunk of Russian newspapers and other periodicals, including all the mainstream ones. Searching for "Litvinenko" produces over 800 articles in the past month and a half (931 total hits), including ones in the government-owned "Rossiiskaia Gazeta". Such scant attention, really, only some 15-20 articles every single day, even if you discount for false hits. Not being satisfied with that, I proceeded to call upon Russians in a couple of Internet forums, as well as contact my acquaintances by email and IM, asking them whether there was much about Litvinenko in the news on TV, including the government channels. All replies indicated that indeed, the Litvinenko affair was mentioned "on all main channels in the news, on multiple occasions". Some even solicitously asked if I was right in the head to even be asking questions with such obvious answers. Well, I'll have to readdress this concern to Alexandra Poolos, on whose behalf I'm doing this. One great recommendation was to check the news archives (with the actual footage of the news programs) of the government-controlled Channel One. Searching in their archives for "Litvinenko", I found out that the story appeared 42 times in their news between 1 November 2006 and 13 January 2007. On some days, such as December 1, among others, it was the very first and the most important news item in the broadcast. Video clips of the broadcasts can be easily viewed on the same site. Scant attention, indeed. And this claim wasn't even hard to verify -- all you needed was an Internet connection and a desire to be honest. Clearly, Alexandra Poolos lacks one of these, and something tells me it's not a problem with her Internet connection.
Our fearless exposer of lies and liars, Alexandra Poolos, further maintains that if you "ask any seemingly cosmopolitan Russians on a downtown Moscow street about their take on the international scandal, [...] they will most likely shrug and suggest that the former spy Alexander Litvinenko poisoned himself just to make Russian President Vladimir Putin look bad." Well, from this I can only assume that Alexandra Poolos never actually bothered to "ask any seemingly cosmopolitan Russians" anything of that nature. Because the polling agencies, those who actually ask such questions as part of their job, came up with somewhat different results. For example, the independent Levada Center conducted a poll between December 8-12 and found that 20% of Russians believe Litvinenko was killed by his former business partners, 15% -- by Boris Berezovsky, 10% -- by Russian special services, 8% -- by western special services, 8% -- he accidentally got poisoned while smuggling radioactive materials, 1% believe it was a suicide. The same poll also asked why Litvinenko was killed. Only 19% of Russians believe it was done to make Russia (14%) or Putin (5%) look bad. Other theories included revenge for something Litvinenko did (15%), due to dangerous information he possessed (14%), in order to create a political emergency in Russia to enable Putin to run for the third term (4%). Thus, Alexandra Poolos's alleged "most likely" replies are possible only from the 9% of respondents who believe Litvinenko killed himself, and the 19% of respondents who believe it was done to damage Russia or Putin. And these two sets don't even necessarily intersect, which would make the number of people who espouse the "most likely" view rather tiny.
It is obvious from the above that Alexandra Poolos believes these "seemingly cosmopolitan Russians" are deceived just because their opinion does not correspond to the one true opinion espoused by our fearless exposer of lying empires, which no doubt is that Putin personally did it, or if not, then it was the KGB on the orders of Putin, or if not, then it was the KGB without the orders of Putin, who is obviously a weak ruler, or if not, it was still Putin's fault somehow. But what are the opinions based on right now? Due to the obvious failure of the Scotland Yard to identify a motive for Litvinenko's murder, the only opinions possible are based on the simple principle of "qui prodest?" -- or "who profits?" -- and nothing else. Seeing how much Russia and Putin actually managed to profit from the affair, only one logical conclusion can be reached. And the fact that it differs for Russians compared to one Alexandra Poolos, it simply means that your average Russian is more intelligent, more logical, and more honest that your average Alexandra Poolos.
After that, we find out about Alexandra Poolos's source for the bizarre allegations above. A certain Jazz Ayvazyan went to London "a week after the story broke in early November." Well, I hate to rain on your parade once again, dear Alexandra Poolos and Jazz Ayvazyan, but the Litvinenko story did not break in early November. Litvinenko was allegedly poisoned on November 1. But there was nothing in the mainstream British media about the story until November 18, when it was claimed that Litvinenko had been poisoned with thallium (which later turned out to be completely false). No surprise there, since Berezovsky, who orchestrated the coverage of the Litvinenko affair, needed some time to retain the services of Tim Bell's PR agency. In contrast to the western media, who needed the Berezovsky PR money to start them rolling on the coverage, the Russian media was already reporting on Litvinenko's poisoning on November 11. As well as the statement from the London police that they know absolutely nothing about Litvinenko's poisoning on November 13. Thus, if you wanted to know anything about Litvinenko before November 18, you had to be in Moscow, not in London. Or at least have Internet access. Of course, further in the article our Jazz Ayvazyan confesses that he had "stopped watching Russian channels and replaced them with Discovery kind of entertainment". No wonder Jazz Ayvazyan doesn't know anything about the Litvinenko affair! After all, the Discovery Channel is the true "empire of lies". Can you imagine, the liars haven't said anything about Litvinenko?!! Good job, Alexandra Poolos, on exposing your own sources as incompetent and/or deceitful. Now I am starting to believe that you are truly out to set all liars straight.
Unfortunately, I should wrap up here, even though there is much to be said about every single claim in the article of the ever honest Alexandra Poolos. However, unlike the brave reporter being reviewed, I'm not paid for this. And since I am taking care to research and verify what I write with facts, I work somewhat slower than your average Alexandra Poolos, who I'm sure can fantasize much faster than I can do research, so she can proceed to the next topic, where she can expose another bunch of dastardly liars. Let's just hope that those "liars" don't decide to verify Alexandra Poolos's claims, like I just did. Because who knows, maybe they will not be as mild-mannered and soft-spoken as I am.
Tuesday, January 9, 2007
Alleged "Oil Woes" of an Alleged "Energy Superpower"
Joining The Economist's permanent obsession with Russia's economic doom and gloom is Leon Aron with his alleged "Russia's Oil Woes". Many amazing discoveries await us in this article. We find out that "the idea that Russia is a new “energy superpower” is all the rage in Moscow", and that it's in fact Putin's idea. That this idea is hollow because Russia cannot produce enough oil to satisfy world's demand. That the reason for this sad state of affairs is the statist ideology of the diabolical Kremlin, which takes over Russian oil companies and prevents them from increasing production due to its mismanagement. Once again, Russia is bound to fail.
The first thing I did upon reading this was to go to a Russian search engine and search for "энергетическая сверхдержава" (that's "energy superpower" in Russian). Quite predictably, the main hits that came up were translations of English language publications into Russian, e.g. from The Wall Street Journal. Now, there is some evidence of discussion on the topic, but the timing of the materials is quite clear. The "energy superpower" concept originated in the West and then migrated to Russia, and now the Russians are trying to figure out if it's worth it or not. Russia has not set out to become an "energy superpower" -- it's merely wondering about another set of ideas the West is trying to force on it. And incidentally, since Leon Aron hasn't noticed it, I have to point out that Putin has already rejected the idea of Russia as an "energy superpower". So, once again Russia is being ascribed a goal it doesn't have, and once it naturally doesn't achieve the goal it didn't have in the first place, Leon Aron, as well as most certainly the WSJ, will gleefully declare that Russia has failed yet again. Nothing new there.
Now, is all that Leon Aron's scaremongering worth the megabytes of network traffic it has generated? From the start, Leon Aron waxes indignant about how the diabolical Russian state destroyed and bought the allegedly "most transparent and efficient companies", Yukos and Sibneft, how it uses "environmental and ecological 'violations'" of Western oil majors to force them to renegotiate contracts. That's right, Leon Aron put "violations" in quotes. Apparently, he doesn't believe that Shell could ever allow any environmental violations while drilling for oil or gas. Apparently, numerous environmental activists who were writing on this topic long before Russia ever publicly concerned itself with Shell's doings, were actually secretly in the employ of the diabolical Kremlin. Leon Aron's indignation about Sibneft's purchase by Gazprom is also a total mystery. Sibneft was bought and paid for, where's the problem in that? As for Yukos, despite any machinations around the transfer itself, the basic cause is that Yukos failed to pay the taxes it owed (is anyone sane who's not being paid by Menatep going to argue that Yukos had been a law-abiding taxpayer?). The government could've chosen to go easy on it, but it didn't, and wiped out the company through legal means. It was within its rights. Finally, I find it difficult to see how anyone can take the claim of Yukos's alleged transparency and efficiency seriously, when enough has been written already to demonstrate that it was patently not the case.
Now that the issues of morality (why did they have to come up anyway, just to add noise and confusion?) have been settled, the only real question remains: is this situation really detrimental to Russia, as Leon Aron claims, or not? First, some facts: Oil, paid for in USD, accounts for more than half of Russia's export revenues (even if for a much smaller chunk of Russia's GDP). This flood of US dollars comes into Russia and is converted into rubles. The Russian Central Bank, in order to keep the ruble exchange rate stable, is forced to print rubles just to buy up all these dollars. In fact, practically all ruble emission is driven by export revenues, while Russia's foreign currency reserves have reached $299.2 billion as of 22 Dec 2006. The rapid increase in money supply causes significant inflation, which in 2006 was barely contained at 9% (it was even higher during the previous years). The federal budget captures more than half of the price of each barrel of oil exported through taxation. Due to rising oil prices, the budget has been running with significant surpluses, which were put into the so-called Stabilization Fund. The government cannot use that fund for fear of stoking inflation. This Stabilization Fund is now at around 3 trillion rubles. It is a paradoxical situation -- the Central Bank keeps printing rubles and the government keeps storing them away in order not to mess up the economy. Hence, the net benefit to Russia of a large chunk of current energy exports is simply more zeroes being painted on presently useless foreign currency reserves, and more zeroes on the presently useless Stabilization Fund balances.
In this situation, Leon Aron, can you somehow explain why anyone in Russia should give a rat's ass about decreasing oil production and energy exports? If Russia fails to export more oil and gas, a real disaster will strike -- the currently bloated foreign reserves will fail to increase yet again. How will Russia survive that? Not to mention the fact that any oil not sold today will remain for future generations of Russians to be used for themselves. Also, could you possibly explain why the government should not in fact own most of the country's oil and gas, as is customary in almost all other energy exporting countries? If 40% of the federal budget depends on energy export revenues, shouldn't the government have a large say in how that revenue is received and used?
So, if Russia doesn't lose from the decrease in energy exports, who does? Hmm, maybe looking at the figures for world's oil consumption will help. I am reasonably certain that China and Japan would love for Russia to produce and export more oil. I am also reasonably certain that the entire EU would jump with joy if Russia produced and exported more oil. But I am more than certain that the US, which consumes one quarter of world's oil, and which has a penchant for starting wars over it, would kill anyone to have Russia produce and export more oil. But short of that, maybe Leon Aron can do the work of trying to convince anyone credulous enough that it is apparently in Russia's own interest to further succumb to the Dutch disease in order to keep the US, the EU, China, Japan and many others supplied with energy.
Now, the conclusion: With all due respect, dear Leon Aron, but if you want to keep your article in its present form, you should retitle it "America's Oil Woes", since it is the US, not Russia, who is poised to suffer. If you want to discuss Russia's oil woes, I recommend examining how Russia exports entirely too much oil, and why she still accepts US dollars as payment for it. It also wouldn't hurt to write an article about the need for the energy importers to start seriously thinking about consuming less, rather than recommending to energy exporters to sacrifice the livelihood of their future generations in order to appease the spendthrift habits of today's SUV-driving suburbanites.
The first thing I did upon reading this was to go to a Russian search engine and search for "энергетическая сверхдержава" (that's "energy superpower" in Russian). Quite predictably, the main hits that came up were translations of English language publications into Russian, e.g. from The Wall Street Journal. Now, there is some evidence of discussion on the topic, but the timing of the materials is quite clear. The "energy superpower" concept originated in the West and then migrated to Russia, and now the Russians are trying to figure out if it's worth it or not. Russia has not set out to become an "energy superpower" -- it's merely wondering about another set of ideas the West is trying to force on it. And incidentally, since Leon Aron hasn't noticed it, I have to point out that Putin has already rejected the idea of Russia as an "energy superpower". So, once again Russia is being ascribed a goal it doesn't have, and once it naturally doesn't achieve the goal it didn't have in the first place, Leon Aron, as well as most certainly the WSJ, will gleefully declare that Russia has failed yet again. Nothing new there.
Now, is all that Leon Aron's scaremongering worth the megabytes of network traffic it has generated? From the start, Leon Aron waxes indignant about how the diabolical Russian state destroyed and bought the allegedly "most transparent and efficient companies", Yukos and Sibneft, how it uses "environmental and ecological 'violations'" of Western oil majors to force them to renegotiate contracts. That's right, Leon Aron put "violations" in quotes. Apparently, he doesn't believe that Shell could ever allow any environmental violations while drilling for oil or gas. Apparently, numerous environmental activists who were writing on this topic long before Russia ever publicly concerned itself with Shell's doings, were actually secretly in the employ of the diabolical Kremlin. Leon Aron's indignation about Sibneft's purchase by Gazprom is also a total mystery. Sibneft was bought and paid for, where's the problem in that? As for Yukos, despite any machinations around the transfer itself, the basic cause is that Yukos failed to pay the taxes it owed (is anyone sane who's not being paid by Menatep going to argue that Yukos had been a law-abiding taxpayer?). The government could've chosen to go easy on it, but it didn't, and wiped out the company through legal means. It was within its rights. Finally, I find it difficult to see how anyone can take the claim of Yukos's alleged transparency and efficiency seriously, when enough has been written already to demonstrate that it was patently not the case.
Now that the issues of morality (why did they have to come up anyway, just to add noise and confusion?) have been settled, the only real question remains: is this situation really detrimental to Russia, as Leon Aron claims, or not? First, some facts: Oil, paid for in USD, accounts for more than half of Russia's export revenues (even if for a much smaller chunk of Russia's GDP). This flood of US dollars comes into Russia and is converted into rubles. The Russian Central Bank, in order to keep the ruble exchange rate stable, is forced to print rubles just to buy up all these dollars. In fact, practically all ruble emission is driven by export revenues, while Russia's foreign currency reserves have reached $299.2 billion as of 22 Dec 2006. The rapid increase in money supply causes significant inflation, which in 2006 was barely contained at 9% (it was even higher during the previous years). The federal budget captures more than half of the price of each barrel of oil exported through taxation. Due to rising oil prices, the budget has been running with significant surpluses, which were put into the so-called Stabilization Fund. The government cannot use that fund for fear of stoking inflation. This Stabilization Fund is now at around 3 trillion rubles. It is a paradoxical situation -- the Central Bank keeps printing rubles and the government keeps storing them away in order not to mess up the economy. Hence, the net benefit to Russia of a large chunk of current energy exports is simply more zeroes being painted on presently useless foreign currency reserves, and more zeroes on the presently useless Stabilization Fund balances.
In this situation, Leon Aron, can you somehow explain why anyone in Russia should give a rat's ass about decreasing oil production and energy exports? If Russia fails to export more oil and gas, a real disaster will strike -- the currently bloated foreign reserves will fail to increase yet again. How will Russia survive that? Not to mention the fact that any oil not sold today will remain for future generations of Russians to be used for themselves. Also, could you possibly explain why the government should not in fact own most of the country's oil and gas, as is customary in almost all other energy exporting countries? If 40% of the federal budget depends on energy export revenues, shouldn't the government have a large say in how that revenue is received and used?
So, if Russia doesn't lose from the decrease in energy exports, who does? Hmm, maybe looking at the figures for world's oil consumption will help. I am reasonably certain that China and Japan would love for Russia to produce and export more oil. I am also reasonably certain that the entire EU would jump with joy if Russia produced and exported more oil. But I am more than certain that the US, which consumes one quarter of world's oil, and which has a penchant for starting wars over it, would kill anyone to have Russia produce and export more oil. But short of that, maybe Leon Aron can do the work of trying to convince anyone credulous enough that it is apparently in Russia's own interest to further succumb to the Dutch disease in order to keep the US, the EU, China, Japan and many others supplied with energy.
Now, the conclusion: With all due respect, dear Leon Aron, but if you want to keep your article in its present form, you should retitle it "America's Oil Woes", since it is the US, not Russia, who is poised to suffer. If you want to discuss Russia's oil woes, I recommend examining how Russia exports entirely too much oil, and why she still accepts US dollars as payment for it. It also wouldn't hurt to write an article about the need for the energy importers to start seriously thinking about consuming less, rather than recommending to energy exporters to sacrifice the livelihood of their future generations in order to appease the spendthrift habits of today's SUV-driving suburbanites.
Saturday, January 6, 2007
Book Review Review
The Economist, it turns out, shares with the readers not only its expertise on Russia's economy (having predicted 20 or so out of the last 0 collapses of the Russian economy), but also on Russia's history. I was privileged to read its review of Geoffrey Roberts's "Stalin's War" (as well as another book, which is not that interesting) with a certain amount of amusement. Now, I haven't read the book itself, but it is the review that amuses me. Instead of explaining how the book is organized, which sources it draws upon, the review's author for some reason decided to argue with it. It is possible that the reviewed book is crap -- but the reviewer himself displayed such problematic knowledge of Soviet history, that it is exceedingly difficult to take him seriously. And, of course, I never did get to find out if Roberts actually did any archival research of primary sources, or if he is regurgitating same old memoir material.
For starters, we find out about a heretofore unknown "Hitler-Stalin pact". The official name of the said document is actually the Soviet-German Non-Aggression Agreement, sometimes called the Molotov-Ribbentrop Pact, by the names of the two foreign ministers who actually negotiated it and signed it. Or in the west it is propagandistically called the Nazi-Soviet Pact. These are all accurate titles, even if they serve to imply different things. But what does "Hitler-Stalin pact" imply? That Hitler and Stalin personally met to sign it, or exchanged messages discussing the agreement? This does not correspond to reality at all. Some journalist hack might use such sloppy terminology, but not any kind of an expert. But wait... it is The Economist... and it is in fact some journalist hack writing the review. Maybe I'll have to withdraw this objection.
Then, of course, what article on Soviet history would be complete without the tired old cliche of "Stalin the mass murderer". The repressions in Stalin era USSR, and Stalin's own complicity in them, were crimes, without a doubt. But packing the immense complexity of the whole phenomenon into a pathetic and sanctimonious "Stalin the mass murderer" concept, despite the fact that the events still haven't been adequately explained by historians, is an example of such extreme reductionism that it should become an affront to any thinking person. Might as well develop the "Bush the mass murderer" theory, despite the fact that it wasn't Bush alone who started the Iraq war, that he is by far not the only one killing Iraqis, and that intentions were different from the outcome.
Another eye-opening revelation was the "fact" of Stalin's alleged failure to prepare for the Nazi invasion. Yes, Stalin is largely responsible for the screwed up Soviet entry into WW2. But that was a momentary mistake of June 1941. But what about the industrialization, the increase of the size of the standing army to over 5 million men in 1941, compared to one million and change in the 30s? Over 20,000 tanks? Ammunition supplies that could last months of intense fighting? USSR possessed none of it 10 years prior. The military potential of the country was on the level of Poland, and it would've been just as easily overrun by the Germans had it not been for the fact that Stalin had been preparing the country for the war. Which is precisely why the Soviet Union won it. Despite the almost fatal mistake of June 1941, for which Stalin bears responsibility. But then again, what leader in his place would not have made the same mistake? Many forget, and this hardly competent reviewer among them, that there was another actor -- the Germans engaged in a very skillful deception campaign, and the disaster of 1941 was not simply Stalin's error of judgment, but also a very well executed deception operation on the part of the Germans. That operation had a high chance of success, Stalin or no Stalin.
But the best part comes last. In it, we find out that the Soviet High Command did not possess the doctrine of strategic defense because... you guessed it, Stalin executed "most of his military brainpower, among them the real Russian strategic genius of the age, Mikhail Tukhachevskii". Thus, in this review we have a curious mixture of Soviet and anti-Soviet propaganda. After all, the myth of Tukhachevskii's alleged genius arose in the 1960s in USSR, during Khruschev's de-Stalinization campaign. And it is now being faithfully repeated by The Economist. The reality is, we don't know if Tukhachevskii was a genius or not. His Civil War experience was mixed, and that war in general was not representative due to its numerous quirks and specifics. Tukhachevskii was basically a peacetime commander, but we can judge the skill of any military leader only in wartime, and Tukhachevskii never got the chance to prove himself. Ironically, the criminal purges of Soviet high command in 1937-1938 cleared the way for the real certified military genius, Marshal G.K.Zhukov, and enabled him to quickly rise to the top.
But the worst part of this Tukhachevskii claim is not even that. The stunning idiocy of this claim is apparent from the fact that Tukhachevskii was never a proponent of strategic defense. The reviewer hasn't read a single article written by Tukhachevskii, but he is oh so full of claims on the topic. The reason USSR had a strategically defensive military doctrine in the 1920s is simple -- USSR was a very weak state recovering from a ruinous civil war. Once the country managed to industrialize and increase its military might, the doctrine naturally changed to one of strategic offense. And that occurred even before Tukhachevskii's execution. The reason is quite clear -- strategic offense wins wars, while the purpose of strategic defense is to delay defeat as long as possible. In both world wars, every Great Power entered them with an offensive plan -- because they aimed for victory, not avoiding being defeated quickly. The only exception was France in WW2, and it cost them dearly -- their defeat was as spectacular as it was unexpected (in WW1, France was, of course, on the offensive, even though it failed). Even puny Poland had an offensive plan against East Prussia.
The cause of the disaster of 1941 for the USSR was not in the lack of defensive planning. The cause was the fact that the Red Army was incapable of either defense or offense at the start of the war. The two prerequisites for the start of a military campaign are a) mobilization -- where reservists are called up to bring military formations to their full strength and to make them fully combat-capable; and b) strategic concentration and deployment -- where military formations are loaded on trains (or march on their own power) and transported to the theater of operations and deployed there according to pre-war operational planning. If one or both of these prerequisites are not met before the start of major operations, the army is not capable of either offense or defense -- it is incapable any military operations. If its divisions are in the wrong location and significantly understrength, it doesn't matter if they attack or defend -- they are simply irrelevant and have no effect on the enemy advance. And this is precisely the situation in which the Red Army found itself on 22 June 1941 -- the mobilization and strategic deployment had not been completed yet (they started too late due to Stalin's error of judgment), and the Soviet forces could neither attack nor defend adequately. Whatever strategic doctrine the Red Army possessed before the war became completely irrelevant.
Thus, in the end, I did not get to find out what Roberts's book really represents. But I did find out that when it comes to the USSR or Russia, The Economist is not the place to go to look for answers, be it economics or history. So my time was not entirely wasted -- a negative result is also a result.
For starters, we find out about a heretofore unknown "Hitler-Stalin pact". The official name of the said document is actually the Soviet-German Non-Aggression Agreement, sometimes called the Molotov-Ribbentrop Pact, by the names of the two foreign ministers who actually negotiated it and signed it. Or in the west it is propagandistically called the Nazi-Soviet Pact. These are all accurate titles, even if they serve to imply different things. But what does "Hitler-Stalin pact" imply? That Hitler and Stalin personally met to sign it, or exchanged messages discussing the agreement? This does not correspond to reality at all. Some journalist hack might use such sloppy terminology, but not any kind of an expert. But wait... it is The Economist... and it is in fact some journalist hack writing the review. Maybe I'll have to withdraw this objection.
Then, of course, what article on Soviet history would be complete without the tired old cliche of "Stalin the mass murderer". The repressions in Stalin era USSR, and Stalin's own complicity in them, were crimes, without a doubt. But packing the immense complexity of the whole phenomenon into a pathetic and sanctimonious "Stalin the mass murderer" concept, despite the fact that the events still haven't been adequately explained by historians, is an example of such extreme reductionism that it should become an affront to any thinking person. Might as well develop the "Bush the mass murderer" theory, despite the fact that it wasn't Bush alone who started the Iraq war, that he is by far not the only one killing Iraqis, and that intentions were different from the outcome.
Another eye-opening revelation was the "fact" of Stalin's alleged failure to prepare for the Nazi invasion. Yes, Stalin is largely responsible for the screwed up Soviet entry into WW2. But that was a momentary mistake of June 1941. But what about the industrialization, the increase of the size of the standing army to over 5 million men in 1941, compared to one million and change in the 30s? Over 20,000 tanks? Ammunition supplies that could last months of intense fighting? USSR possessed none of it 10 years prior. The military potential of the country was on the level of Poland, and it would've been just as easily overrun by the Germans had it not been for the fact that Stalin had been preparing the country for the war. Which is precisely why the Soviet Union won it. Despite the almost fatal mistake of June 1941, for which Stalin bears responsibility. But then again, what leader in his place would not have made the same mistake? Many forget, and this hardly competent reviewer among them, that there was another actor -- the Germans engaged in a very skillful deception campaign, and the disaster of 1941 was not simply Stalin's error of judgment, but also a very well executed deception operation on the part of the Germans. That operation had a high chance of success, Stalin or no Stalin.
But the best part comes last. In it, we find out that the Soviet High Command did not possess the doctrine of strategic defense because... you guessed it, Stalin executed "most of his military brainpower, among them the real Russian strategic genius of the age, Mikhail Tukhachevskii". Thus, in this review we have a curious mixture of Soviet and anti-Soviet propaganda. After all, the myth of Tukhachevskii's alleged genius arose in the 1960s in USSR, during Khruschev's de-Stalinization campaign. And it is now being faithfully repeated by The Economist. The reality is, we don't know if Tukhachevskii was a genius or not. His Civil War experience was mixed, and that war in general was not representative due to its numerous quirks and specifics. Tukhachevskii was basically a peacetime commander, but we can judge the skill of any military leader only in wartime, and Tukhachevskii never got the chance to prove himself. Ironically, the criminal purges of Soviet high command in 1937-1938 cleared the way for the real certified military genius, Marshal G.K.Zhukov, and enabled him to quickly rise to the top.
But the worst part of this Tukhachevskii claim is not even that. The stunning idiocy of this claim is apparent from the fact that Tukhachevskii was never a proponent of strategic defense. The reviewer hasn't read a single article written by Tukhachevskii, but he is oh so full of claims on the topic. The reason USSR had a strategically defensive military doctrine in the 1920s is simple -- USSR was a very weak state recovering from a ruinous civil war. Once the country managed to industrialize and increase its military might, the doctrine naturally changed to one of strategic offense. And that occurred even before Tukhachevskii's execution. The reason is quite clear -- strategic offense wins wars, while the purpose of strategic defense is to delay defeat as long as possible. In both world wars, every Great Power entered them with an offensive plan -- because they aimed for victory, not avoiding being defeated quickly. The only exception was France in WW2, and it cost them dearly -- their defeat was as spectacular as it was unexpected (in WW1, France was, of course, on the offensive, even though it failed). Even puny Poland had an offensive plan against East Prussia.
The cause of the disaster of 1941 for the USSR was not in the lack of defensive planning. The cause was the fact that the Red Army was incapable of either defense or offense at the start of the war. The two prerequisites for the start of a military campaign are a) mobilization -- where reservists are called up to bring military formations to their full strength and to make them fully combat-capable; and b) strategic concentration and deployment -- where military formations are loaded on trains (or march on their own power) and transported to the theater of operations and deployed there according to pre-war operational planning. If one or both of these prerequisites are not met before the start of major operations, the army is not capable of either offense or defense -- it is incapable any military operations. If its divisions are in the wrong location and significantly understrength, it doesn't matter if they attack or defend -- they are simply irrelevant and have no effect on the enemy advance. And this is precisely the situation in which the Red Army found itself on 22 June 1941 -- the mobilization and strategic deployment had not been completed yet (they started too late due to Stalin's error of judgment), and the Soviet forces could neither attack nor defend adequately. Whatever strategic doctrine the Red Army possessed before the war became completely irrelevant.
Thus, in the end, I did not get to find out what Roberts's book really represents. But I did find out that when it comes to the USSR or Russia, The Economist is not the place to go to look for answers, be it economics or history. So my time was not entirely wasted -- a negative result is also a result.
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