All posts by Editor

The undoing of Vladimir Putin

Russia is on the march, but its economy is crumbling. No party can survive once the money runs out.

During Catherine the Great’s tour of Crimea in 1787*, Russian Prince Grigory Potemkin is said to have created entire plasterboard villages and hustled the same group of happy peasants back and forth along her route to impress the empress with a vision of prosperity. Recent scholarship suggests the tale of the Potemkin village is largely apocryphal. The prince probably just put some ribbons and banners on existing buildings and hid a few beggars out of sight. Yet the myth persists, largely because it says something useful about Russia and its fixation on outward appearances. It still holds some truth today.

Since welcoming the world to the lavish 2014 Sochi Winter Olympic Games, Russian President Vladimir Putin has embarked on an ambitious and calculating campaign to return his country to global prominence through military strength. He began by invading Ukraine and seizing the Crimean Peninsula, drawing immediate condemnation and sanctions. Russian bombers and submarines now regularly test the defences of Western countries, in a reprise of Cold War tensions. And NATO has serious concerns about protecting member Baltic states Estonia, Latvia and Lithuania from a Crimean-style blitzkrieg. A recent RAND Corporation wargame scenario found Russia could likely capture all three capital cities in under 60 hours. Canada’s plan to send a 450-soldier battlegroup to Latvia next year is a small bulwark against this possibility.

In the Middle East, Russian jets have pounded the Syrian city of Aleppo to rubble while Russia’s only aircraft carrier, the aging Admiral Kuznetsov, makes its way to the Syrian coast where it will be the centrepiece of a large Russian naval force in the Mediterranean—a military build-up unprecedented since the collapse of the Soviet Union. “Russia has no intention of attacking anyone, Putin said in a speech last week. No one believes it.

Russia has even inserted itself into the United States’ presidential election, as it is widely accepted that a cyberattack on the Democratic Party was the work of Russian hackers. Republican nominee Donald Trump, a fan of Putin’s aggressive political style, has gleefully seized upon the purloined information.

Russia has returned as a foil to Western democratic ideals. But how deep does the threat run?

It is a lesson of geopolitics that military force is merely a reflection of economic strength. Without a strong and growing economy behind it, no military can project power over the long term. While Putin has engineered a stunning reversal of Russia’s international reputation, there remains a massive hole in his economic defences. In many ways, Russia is a Potemkin country.

The collapse of oil prices and sting of Western sanctions has thrown Russia into a severe recession. According to the World Bank, between 2013-15, Russia’s GDP fell a stunning 40 per cent. Despite a population four times our size, the Russian economy is now smaller than Canada’s. Last year, Russian inflation hit 12 per cent. Poverty is up significantly, wiping out more than a decade of progress. Putin has decreed the national deficit cannot exceed three per cent of GDP next year, but with state pensions and other public spending programs rapidly losing ground to inflation and cuts, he has so far avoided significant reductions in the massive military budget. But a new budget proposal this week contemplates a 27 per cent cut in defence spending.

Putin’s autocratic rule is not in any immediate danger; his United Russia party won a resounding victory in parliamentary elections this September and there are slight signs of an economic recovery. Yet no party can survive once the money runs out. During the glory days when oil fetched more than $100 a barrel, Russia socked away its surpluses in a reserve fund. Denied access to conventional bond markets due to Western banking sanctions, Russia has come to rely heavily on this nest egg to cover its shortfalls. From US$85 billion in January 2015, the fund will sink to $15 billion by the end of this year. According to Ondrej Schneider, chief economist at the Institute of International Finance, “at the current rate, the fund would be depleted in mid-2017, perhaps a few months later.” The outlook for Russia, says Schneider, is “sombre.”

There’s no denying the large shadow Russia currently casts over global affairs. But having rebuilt his military during an oil boom, Putin is now facing a struggle to maintain this reputation as Russia’s economy weakens—a prospect that may make him even more dangerous and unpredictable over the short term. Containing Putin will require continued and united opposition to his bullying tactics. Sanctions have clearly had an impact and will bite deeper over time. It’s also necessary to meet military feints with equivalent chess moves, as in Latvia. Finally, we can’t neglect the role of economic growth as a strategic weapon. The collapse of Communist Russia was ultimately brought about by its failure to keep pace with Western capitalism. The same thing will likely be the undoing of Putin too.

Crimea, Donbas, Aleppo — crimes of historic proportions

Russian President Vladimir Putin has achieved his goal. He has entered the history books as a head of state who has committed “crimes of historic proportions.” This is exactly how the UN High Commissioner for Human Rights, Zeid Ra’ad Al-Hussein, described the bombing of east Aleppo in Syria. The official did not directly name the country responsible for the actions leading to these crimes. But he urged the major powers of the world to turn over the investigation of the tragedy in Aleppo to the prosecutor of the International Criminal Court. The UN Human Rights Council voted to conduct a special international investigation of the crimes in Aleppo. Russia and its shameless allies voted against it. Because they had no doubts that the bloody footprints would lead investigators to the office of Vladimir Putin.

Actually, such a course of events was not difficult to predict. It was predictable even when the Russian military began the occupation of Ukrainian Crimea on Putin’s direct orders. Putin likes to say that this occupation was “bloodless” even though two Ukrainian soldiers were killed, followed by the murders and torture of Crimean Tatars and other activists. But, of course, this did not impress the world as much as the bombing of Aleppo does now. And Putin became intoxicated with impunity.

The Donbas war was the next phase in his crimes. Here people were already dying by the hundreds, thousands were left homeless, and millions were forced to flee. But aviation was not used during the conflict and Russian propaganda tried to create the impression of a “civil war” where the Kremlin was acting as the protector of a mythical category of Ukrainian citizens — the Russian-speaking population.

The destruction by the Russian military of the Malaysia Airlines passenger jet on territory controlled by Moscow was a serious miscalculation by Putin. However, investigations of these kinds of accidents usually take a very long time. And Putin found the time for a new adventure — the Syrian one.

Many experts in the West now claim that the Russian army in Syria has been more efficient than had been expected at the beginning of the campaign. Perhaps this is the case from the military point of view. In Afghanistan, the armed forces of the Soviet Union were efficient as well. But it is impossible to win when practically the entire nation is fighting against you, and when the army of the dictatorship is unable to overcome its opponents. As a result, several tens of thousands of Soviet soldiers died. And more than a million of Afghans were killed. But the Soviet Union had no other way to save the puppet regime of Babrak Karmal than by carrying out the mass destruction of Afghans. That is why it was Afghanistan and not Hungary or Czechoslovakia, with many fewer victims of the Soviet invasion, that became the grave of the communist regime.

Now the same situation is being repeated in Syria.

Putin has no other way of supporting Bashar al-Assad than by killing hundreds of thousands of Syrians. However, he still will fail to achieve victory; he will simply destroy people and cities.

But now is not the age of Afghanistan. There are completely different information technologies. There are completely different internet and television capabilities. There is a completely different attitude toward Russia. Putin’s country is not the USSR with its “protection of workers and peasants,” and Moscow will no longer be able to deceive anyone with slogans.

Every day the world can see horrifying images from Aleppo on its TV screens. Images of Putin’s crimes. Crimes of historic proportions.

But Putin has limited options. He cannot stop the massacre of Syrians because that would condemn Assad’s regime to a quick collapse. He cannot continue the bombing because each new shelling worsens his relationship with the civilized world and creates a gap between that world and Russia. For the time being the pro-Russian lobby in the West can still defend his interests, block the introduction of new sanctions, talk about the need for dialogue. But all this will end soon. Russia’s isolation is a matter of time. And the reason for this isolation is war crimes. Crimes of historic proportions.

The Russian president mistakenly thinks that he will not be held responsible. He will be. The day will come when he and other Russian leaders will be handed over to the International Tribunal by their own countrymen. Putin has simply failed to realize that with his Syrian actions he has crossed the line that separates the politician who seeks to protect his own interest from the common serial killer.

From –

Saakashvili resigns, accuses Poroshenko allies of corruption

Mikheil Saakashvili, the governor of Odesa Oblast and ex-president of Georgia, submitted his resignation on Nov. 7.

Saakashvili, who became governor in May 2015, attributed his resignation to what he described as the sabotage of his reforms in the region by the central government, including President Petro Poroshenko. He also accused the president’s inner circle of being corrupt.

Saakashvili’s resignation was preceded by that of his protege, Odesa Oblast police chief Giorgi Lortkipanidze, on the same day. Another Saakashvili ally, Davit Sakvarelidze, was fired as chief prosecutor of the region and deputy prosecutor general in March.

Two other appointees of Saakashvili, Maria Gaidar and Sasha Borovik, resigned as deputy governors of Odesa Oblast in May, though they stayed on as advisors.

Poroshenko’s press office said the president would approve Saakashvili’s resignation if the Cabinet authorized it, and that it would analyze the reasons for his intention to resign. However, Poroshenko’s representatives declined to comment on the governor’s accusations of corruption among officials and sabotage of reform.

“I’ve decided to resign and start a new stage of my struggle,” Saakashvili said. “… I’ll do whatever is necessary to get rid of this corrupt scum that profiteers on the blood of our soldiers and the victims of EuroMaidan – the scum that betrayed the idea of the Ukrainian Revolution.”

Borovik told the Kyiv Post that the governor’s move was “politically smart” and a “sign of despair.”

“It has been impossible to get anything done, and he started to engage more and more in the struggle with local elites and the Mafia without any real power on his own,” Borovik said. “Now he should lead the opposition of the pro-reformists to the president and his camp, as well as to the People’s Front and the oligarchs.”

Sakvarelidze said on Nov. 7 that Saakashvili would not leave Ukraine and would continue political activities in the country. Saakashvili started a reformist political project called the Movement for Cleansing last year, while his supporters launched the reformist Hvylia (Wave) party in July.

Sergii Leshchenko, a lawmaker from the Poroshenko Bloc, said on Nov. 7 that Saakashvili would try to unite Hvylia with another reform-oriented party, the Democratic Alliance. He also said that Saakashvili’s efforts had been blocked because he rejected Poroshenko’s offer to head the presidential bloc.

“Saakashvili’s resignation is the logical completion of the exodus of reformers,” Leshchenko said. “… It resulted from the expulsion of everyone who refused to be part of the corrupt consensus.”

Poroshenko’s allies

In his resignation statement, Saakashvili lashed out at Poroshenko and his allies. Those named by Saakashvili deny the accusations.

“I’m sick and tired,” Saakashvili said. “Is there any difference for Ukrainians whether it’s Poroshenko or (ex-President Viktor) Yanukovych spitting on them? Is there any difference if they are robbed by (Yanukovych ally) Yury Ivanyushchenko or (Poroshenko ally Ihor) Kononenko? Is there any difference whether (Poroshenko’s deputy chief of staff Vitaly) Kovalchuk or (Yanukovych’s chief of staff Andriy) Klyuyev embezzles everything?”

Saakashvili argued that ex-Prime Minister Arseniy “Yatsenyuk’s people were edged out by Poroshenko’s people, but they keep running the same corruption schemes.” Interior Minister Arsen Avakov and State Fiscal Service head Roman Nasirov, whom he believes to be “strongholds of corruption,” have remained in their jobs, he added.

He said that Poroshenko supported two clans in Odesa Oblast: “the criminal clan of (Odesa Mayor Gennady) Trukhanov and the corrupt Izmail clan of (politician) Igor Urbansky.”

According to an Italian police dossier obtained by the investigative journalism project, Trukhanov was a member of a criminal gang in Odesa in the 1990s. He denies the accusations.

Saakashvili also accused lawmakers Oleksiy Goncharenko from the Poroshenko Bloc, Serhiy Kivalov from the Opposition Bloc and Oleksandr Presman from the Vidrodzhennya party of robbing Odesa, under both Yanukovych and Poroshenko.

Sabotage of reforms

Saakashvili said the central authorities were blocking all of his reform efforts in Odesa.

“The regressive forces are attacking everything progressive. All new initiatives are being nipped in the bud,” he said. “… I’ve never been deceived so much in such a cynical way in my life.”

One of the reasons for his resignation cited by Saakashvili was that his team’s efforts to create a graft-free customs terminal in Odesa, called the “open customs area,” had been blocked by the central government. Initially the terminal was scheduled to be launched in May, but it has still not opened yet.

“The money for the repairs (necessary for the terminal’s launch) was stolen,” he said. “As usual, we were deceived. The president promised to support us, but didn’t lift a finger to launch this project. For how long will they keep lying and deceiving?”

Yulia Marushevska, a Saakashvili ally and head of Odesa Oblast’s customs, told the Kyiv Post that her team had held a transparent competition for jobs at the new terminal and drafted legislation to launch it. However, Nasirov and Prime Minister Volodymyr Groysman have failed to pass a necessary Cabinet decree, authorize changes to customs software and build the terminal’s building, she said.

Nasirov has denied the accusations of sabotage, while Groysman’s press office could not comment immediately.

Marushevska said she had not resigned yet. “My further actions depend on whether they will let me reform the customs office or not,” she added.

Another reason for Saakashvili’s move is that the facility to provide administrative services in Odesa, which was opened by him last year, has been closed.

Saakashvili said on Nov. 2 that the center had been shut down because legislation backed by the Poroshenko Bloc of lawmakers in parliament and other parties made it impossible to use the facility’s revenues to fund its employees’ wages.

The facility, which is modeled on similar Georgian ones, was intended to drastically speed up the provision of government services and make them customer-friendly and corruption-free. The services included the issuing of passports, as well as the registration of businesses, non-governmental organizations, real estate, ownership rights, land plots and place of residence.

The central government has also been dragging its feet on appointing three out of Saakashvili’s four deputies, who were selected in a transparent competition, Saakashvili said.

He also claimed that instead of allowing his team to hold open and transparent competitions for the jobs of district heads in several of the oblast’s districts, the central government had allegedly chosen loyalists in rigged competitions.

“They have resurrected old schemes and started selling the jobs of district administration heads,” Saakashvili said.

Last year Saakashvili’s team held transparent competitions in other districts of the region, choosing Western-educated professionals to replace local bureaucrats.

Saakashvili has also complained that the authorities were under-financing one of his landmark projects, a highway linking Odesa with the city of Reni on the border with Romania. In June he moved into a tent on the highway to oversee the construction work.

From –

Russia’s Flotilla Flop

Moscow wanted to impress the world, but mostly we just laughed

Russia’s great flotilla of eight naval ships to the eastern Mediterranean hasn’t been the public diplomacy coup Moscow hoped for.

NATO calls the flotilla “the largest surface deployment since the end of the Cold War,” but most people in Russia or in the West who know anything about it have probably only seen the photos of the Admiral Kuznetsov — Russia’s only aircraft carrier — billowing smoke on the open water.

You might be surprised to learn that the Kuznetsov hasn’t broken down: the smoke is normal for the 30-year-old ship, which runs on diesel fuel. That ominous plume of black smoke rising up from the flight control tower? The Russian military expected you to see that.

What Moscow apparently failed to anticipate is the ridicule such ancient-seeming technology would invite in cyberspace, where the Kremlin’s opponents and nervous foreign observers have seized the images as proof of Russian military decline, despite the ongoing intervention in Syria.

On Twitter some of Vladimir Putin’s most popular critics have had a field day with the publicity backlash. With a touch of photoshop, for instance, Ilya Repin’s classic painting “Barge Haulers on the Volga” was transformed into a joke about the Kuznetsov. The caption below reads, “Russia in one picture.”

Mass arrests of militants in Donetsk and Horlivka (Gorlovka)

Militant ‘police’ chiefs arrested under the pretext of Motorola’s murder investigation

Numerous sources report mass arrests of militant chiefs and regular members of so-called ‘DPR’ force structures in Donetsk region. Today such detaining of ‘DPR police’ chiefs noted in militant-held town of Horlivka.

Ukrainian journalist from the town of Horlivka in Donetsk region Oleksandr Bilinsky revealed the details.

“In Horlivka today again those who got too wealthy in these past two years were cleansed. The search revealed a lot of weapons, money and fake documents possessed by the chief of ‘traffic police’ Dmitry Tuva. He is responsible for trafficking to Rostov stolen cargo trucks, left by businessmen who fled to other cities of Ukraine. Chief of driving licenses office Denis Nemytkin is in intensive care, after a ‘conversation’ with “DPR MGB” (‘state security ministry’ of ‘DPR’ – UT) his lungs failed. I remember before the war you could ‘solve’ any question with him, he was ‘a purse’ of this office,” journalist wrote on Facebook.

Ukrainian MP and coordinator of ‘Information Resistance’ volunteer group Dmytro Tymchuk gave a wider picture of situation.

“‘DPR MGB’ carries out large-scale detention of ‘DPR police’ staff. It has been said these are suspects involved in the liquidation of the commander of ‘Sparta’ gang, ‘Motorola’. There are rumours spreading among the employees of ‘DPR interior ministry’ that the detentions were carried out on the direct orders of the ‘DPR’ leader Zakharchenko, who uses the elimination of ‘Motorola’ to eliminate undesirable elements from the ministry like Plotnitsky did in ‘LPR’ (the last one under the pretext of ‘combating the consequences of the coup attempt’ conducts mass purges in the ‘state institutions of LPR'”), Tymchuk explained. 

“This is what happens to traitors. They become expendable for their own henchmen,” Oleksandr Bilinsky summarized. 

How Putin loses grip on Russia’s pipeline politics

As President Vladimir Putin seeks to reinforce Russia’s position as a global power through nuclear saber-rattling and military campaigns in Ukraine and Syria, the next U.S. administration will need to both contain and cooperate with him. If played right, that may get easier in the years to come. The reason: The transformation of the world’s natural gas markets is weakening Moscow’s economic toolkit. And that will make Putin’s pipeline politics — his use of natural resources for foreign policy purposes — obsolete. 

It’s clear that Russia will try to make a last stand to hold on to its natural gas market in Europe. Last Tuesday, the European Union granted Russian gas behemoth Gazprom access in Germany to the Opal pipeline, which connects to central and eastern European markets. Other Moscow plans include building new pipelines in the Black and the Baltic seas. During a recent visit to Ankara, Putin signed an agreement with his Turkish counterpart, Recep Tayyip Erdoğan, to build the on-again-off-again Turk Stream undersea gas pipeline, which will allow Moscow to strengthen its position in the European gas market.

In addition, Moscow is ignoring strong opposition from such EU member states as Poland, Hungary, the Czech Republic and Slovakia as it tries to bulldoze ahead with its planned Nord Stream II pipeline, which will bypass Ukraine to bring Russian gas to Germany.

Even if these pipelines are built, which is increasingly unlikely in the case of Nord Stream II, Russian energy politics are coming to the end of their heyday. Since the late 2000s and the early 2010s, the global gas sector has experienced a significant shift following the boom in U.S. shale-gas development. The breakthroughs in hydraulic fracturing and horizontal drilling techniques have irreversibly altered the landscape of the American natural gas industry.

The United States is the world’s leading gas producer and, since 2016, a liquefied-natural-gas (LNG) exporter to Brazil, India, United Arab Emirates, Argentina, Portugal, Kuwait, Chile, Spain, China, Jordan and, most recently, the United Kingdom. This creates competition for Russian gas both inside and outside Moscow‘s traditional European turf.

From –

Putin Was Fooled by Bogus Report in Russia’s Own State Media

At a conference on Monday for interethnic relations in Russia, President Vladimir Putin cited a fabricated news story from the state-owned television network Channel One, which claimed that the Austrian Supreme Court acquitted a Middle-Eastern refugee of raping a 10-year-old boy. 

Putin mentioned the story in order to explain why Russia should draw on its own experiences with interethnic relations, rather than Europe’s. 

“You saw what happens — an immigrant raped a child in one of the European countries,” the president said. “The court acquitted him for two reasons: one, he did not speak the host country’s language; and, two, he didn’t know that the boy — and it was a boy — objected.” 

This was a clear reference to a story Channel One aired on the morning of Oct. 26 about “blatant tolerance” towards immigrants in the EU, featuring a claim about an Iraqi migrant named Amir who was convicted of raping a 10-year-old boy in a swimming pool. According to the story, the rapist’s conviction was overturned by the Austrian Supreme Court because the prosecution failed to establish that the defendant understood that his victim objected to his sexual advances.

In reality, the 20-year-old immigrant was not acquitted by the court, but rather is still in state custody awaiting a new trial that will take place in 2017.

From –

Ukrainians shocked as politicians declare vast wealth

An anti-corruption reform requiring senior Ukrainian officials to declare their wealth online has exposed a vast difference between the fortunes of politicians and those they represent.

Some declared millions of dollars in cash. Others said they owned fleets of luxury cars, expensive Swiss watches, diamond jewelry and large tracts of land – revelations that could further hit public confidence in the authorities in Ukraine, where the average salary is just over $200 per month.

Officials had until Sunday to upload details of their assets and income in 2015 to a publicly searchable database, part of an International Monetary Fund-backed drive to boost transparency and modernize Ukraine’s recession-hit economy.

Prime Minister Volodymyr Groysman, who last week likened the declarations process to jumping out of an airplane, revealed that he and his wife had a total of $1.2 million and 460,000 euros in cash and a collection of luxury watches.

The database also shows that Groysman, a former businessman and provincial mayor, is not alone in preferring to keep much of his money out of Ukraine’s banking system.

Reuters calculations based on the declarations show that the 24 members of the Ukrainian cabinet together have nearly $7 million, just in cash.

The declarations of two brothers in President Petro Poroshenko’s faction, Bohdan and Yaroslav Dubnevych, show holdings of over $26 million, also in cash only.

“When the Economy Ministry says that in some areas around 60 percent of the economy is in the shadows, then this is accounted for by the volume of cash registered by civil servants, officials and lawmakers,” said Taras Kachka, deputy executive director at George Soros’s International Renaissance Foundation.

“This is a reflection on the state of our society.”

Justice Minister Pavlo Petrenko, who declared $1 million in a bank account and a further $500,000 in cash, said officials’ decision to hold cash pointed to a mistrust in the banks that many Ukrainians could relate to.

“Of course to EU countries it seems uncivilized that people hold cash,” he said. “But it is linked to the fact that the banking system could, let’s say, be doing better. This is a problem for many Ukrainians who lost their savings in the bank.”


The online declaration system is intended to represent a show of good faith that officials are willing to open their finances up to public scrutiny, to be held accountable, and to move away from a culture that tacitly allowed bureaucrats to amass wealth through cronyism and graft.

However, the public reaction has been one of shocked dismay at the extravagant lifestyles conjured up by many of the disclosures.

“We did not expect that this would be such a widespread phenomenon among state officials. I can’t imagine there is a European politician who invests money in a wine collection where one bottle costs over $10,000,” said Vitaliy Shabunin, the head of the non-governmental Anti-Corruption Action Center.

Opposition bloc lawmaker Mikhail Dobkin’s declaration included 1,780 bottles of wine and an antique copy of Russian novel Anna Karenina worth at least $5,500.

Roman Nasirov, the head of the State Fiscal Service, disclosed that he and his wife owned Swiss watches, diamond jewelry, fur coats, fine porcelain and crystal glassware, an assault rifle and cash in euros and dollars worth $2.2 million.

The declaration of Oleh Lyashko, the head of the populist Radical party who has styled himself as a representative of the common man, showed he rented a house and land in Kiev’s most exclusive district and his household had cash worth the equivalent of over $1 million.

Other forms give an insight into particular hobbies and interests of Ukraine’s elite.

Ihor Hryniv, the head of Poroshenko’s faction, has a collection of icons dating from the 14th century and several works by Ukrainian impressionist masters. Lawmaker Ihor Mosiychuk declared an array of antique weapons, including a 16th century Turkish scimitar, an English broadsword and a Nazi SS dagger.

Many senior politicians filed their forms in the last two days before the deadline, resulting in a crescendo of surprise and anger on social media over the weekend.

“I personally feel unwell. Or rather, like someone who has been beaten and is therefore unwell. I had no illusions about our political and official elite. But all the same, what’s come out is beyond the pale,” Roman Donik, a volunteer to Ukraine’s frontline troops, said on Facebook.

The average Ukrainian citizen has been hit hard by the economic crisis that unfolded in the wake of the 2014 pro-European ‘Maidan’ uprising and subsequent pro-Russian separatist conflict.

The national hryvnia currency has plummeted to 25 to the dollar from 8 in 2013 and energy tariffs have soared under the IMF-backed economic reform program.

The latest revelations will likely add to public dissatisfaction with the current leadership’s progress on reforms. A September poll showed that only 12.6 percent would now vote for Poroshenko’s faction, down from 21.8 in the last election. Meanwhile support for populist and opposition parties has risen.

The anti-corruption agency says it will now start verifying the declarations, but with over 100,000 forms submitted, it is unclear how thorough the process can be.

From –

Ukraine stunned as vast cash reserves of political elite are made public

New wealth declaration system shows officials owning Fabergé eggs, weapons collections and huge stashes of currency

Two years after angry Ukrainians deposed Viktor Yanukovych and broke into his vast, opulent residential compound outside Kiev, revelations thrown up by a new system that requires government officials to declare their wealth and property online have led many to suspect the new elite are no better.

The declarations, which all officials were required to file by Sunday evening, have made public many curiosities, including politicians who own multiple luxury watches, Fabergé eggs and large collections of weapons. One politician declared that he owned a personal church.

By far the biggest shock, however, has been just how much money Ukraine’s politicians seem to stash away in hard cash.

The prime minister, Volodymyr Groysman, declared $1.2m (£980,000) and €460,000 (£410,000) in cash, as well as a collection of luxury watches. Many other officials declared hundreds of thousands of dollars worth of cash.

“Everyone is amazed that there is so much cash in our country,” said Kristina Berdynskykh, an investigative journalist who has written extensively on corruption among the elite.

Mikhail Dobkin, an opposition MP, declared 1,780 bottles of wine, while Roman Nasirov, the head of the state fiscal service, declared that together, he and his wife owned Swiss watches, diamonds, fur coats and held more than $2m in cash.

Observers have pointed out that when the head of the national bank keeps his savings in dollars, it can hardly fill the population with confidence about the prospects for the hryvnia, Ukraine’s national currency.

Other curiosities found among the declarations included a Nazi SS dagger and medieval religious icons. Anatoly Matviyenko, the deputy leader of the presidential faction in parliament, declared ownership of a church.

“The other thing that is amazing is the excess. Even if someone is well-off, it’s not clear why a state official requires 10 luxury watches, 30 plots of land or his own personal chapel,” Berdynskykh said.

One of the key demands of the Maidan revolution of 2014 was an end to the rampant corruption that plagued the country. When protesters stormed Yanukovych’s compound they found gold-plated golf clubs, a petting zoo and a replica of a Spanish galleon moored in a manmade lake.

The current president, Petro Poroshenko, is a billionaire tycoon, but promised a new, more transparent kind of politics. Critics say reform efforts have stalled and that despite impressive rhetoric, the government has done little to transform the fundamental nature of Ukrainian business and politics.

Setting up the electronic declaration system was one of a number of conditions laid down by the EU as requirements to ensure a visa liberalisation deal for Ukrainians. Anders Fogh Rasmussen, the former secretary general of Nato, who is an adviser to Poroshenko, said: “Ukraine has taken a crucial step to break with corruption and ensure a clean and efficient public administration. The e-declaration is of paramount importance and all of Europe should take notice and applaud this important step.”

Poroshenko called the declarations “a truly historic event of openness and transparency”.

However, inside the country, the response was far from enthusiastic. One columnist referred to Ukrainian officials as “moral degenerates”. In a society where the average wage is under £200 per month, the lavish wealth on the declarations only underscored the vast gulf between the political elite and average Ukrainians who are largely impoverished.

There was also anger at such vast displays of wealth while thousands of Ukrainians in the army receive low salaries to risk their lives on the frontline of a war with Russia-backed separatists in the east of the country.

The key indicator of whether the declarations serve their purpose in the fight against corruption will be what action is taken by the country’s authorities to investigate them.

Berdynskykh said: “It’s amazing how much information we have now, as a journalist I couldn’t have dreamed of this before. Some MPs have released the names of offshore companies they are linked to, and it will be interesting if the anti-corruption bureau will actually follow up with real questions now.

“Also, some MPs have said nothing, claiming they have no bank accounts, no cash, and live only on their official salary. And we all know this isn’t true. Will they be checked as well?”

From –

Russia Has to Be Contained (But So Does Every Superpower)

The West has increasingly spoken in recent years of the need to contain Russia. But in doing so, it has blurred the line between “containment” and “deterrence.” Today, observers speak primarily of the latter, with the connotation of “intimidation” and the use of “scare tactics.” Of course, containment is impossible without the use of force, but where simple scare tactics suffice, full-scale containment is unnecessary.

At a recent meeting between Russian experts and U.S. investors and political analysts, the discussion focused on the need to make corrections to the so-called “plutonium agreement.” The U.S. delegation reiterated that the conflict over weapons-grade plutonium is a simple misunderstanding on technical matters.

However, the Kremlin does not want the problem to be perceived this way. Otherwise, it would not have incorporated an ultimatum to the United States in the text of a federal law subsequently adopted by the State Duma. That law calls for the U.S. to reduce its military infrastructure on the territory of NATO member states, “abandon its hostile policy towards Russia,” and even “provide compensation for damages Russia suffered…from having to introduce counter-sanctions against the U.S.” Normally, victorious countries deliver such ultimatums to the vanquished.

The law communicates one message very clearly – that when it comes to the most important issues, nothing and no-one can “contain” Moscow.

Critics of U.S. President Barack Obama argue that his policy of sanctions has failed. They point out that, even under sanctions, Russia has managed to work against U.S. interests in a number of regions around the world.

However, the classical 1940s concept of containment did not imply the literal isolation of the Soviet Union, much less the entire Eastern bloc. Even during his most fervently anti-Kremlin period, George F. Kennan, the founder of U.S. containment strategy during the Cold War, held that the only way to contain Russia was not to isolate it, but to involve it in the global system. Kennan advocated using a system of checks and balances that differed fundamentally from the one that guarantees domestic freedoms in the Anglo-Saxon world.

Here we come to the core of the problem.

Why did the U.S. concern itself with this issue in the first place? Because, when a center accustomed to applying force to others loses its bearings, it has the potential to go unstable. It becomes incapable of assessing the risks of its behavior. So what should be done?

In the 1940s, the West aimed its strategy, oddly enough, at helping Stalin’s Russia move forward in a predictable manner, without excesses. It compensated for the Soviet Union’s ruinous lack of internal restraints with a system of external political constraints. The West did not seek to isolate the Soviet Union, but left it room to move, instead attempting to channel that energy along a particular path. This gave rise to the concept and policy of “containment.”

The intentional sphere had a two-bloc system, and although observers continued referring to it as a Cold War, it was essentially a process of searching for equilibrium. The extreme shortage of democracy in the Eastern Bloc was offset by external substitutes, ranging from NATO and the UN, to the IMF and EU.

It is no accident that Russia is losing its restraint. It stems from weakness, from long having sought an easy way to integrate with the global system rather than doing the hard work of institution building and reform.

Russia is very weak. It has no state institutions and no competent government bureaucracy. Its leadership has degenerated into a personality cult. And what’s more, that leadership is always ready to aggravate the situation. Only in this way do its members take on the appearance of true leaders – only during those brief moments when tensions flare over yet another emergency that they themselves have created.

Putin, in the role of President, has already played the lead in so many different scenes that any actor might envy him. But this musical comedy has gone on too long – and for Putin himself, it has become a daily charade. It has been said that some tzars reign, but they don’t govern. In Russia, every attempt at governing immediately degenerates into a sham.

Can any such structure hold itself together from within? No. Can an outside force keep it in line? No it can’t.

Russia has turned itself into a generator of global crises, and has been offering it for some time now practically as a product or service. Now the Moscow authorities always have something to offer the Russian people: the ability to ratchet up tensions in the world and grab the spotlight.

It would be a mistake to look at the Admiral Kuznetsov warship, belching smoke as it plies the English Channel, and see it as a simple yet controversial symbol of Russian weakness. Deep inside, unsuspected by the casual observer, lies an engine room – a crisis generator. The grime and smoke, typical of any engine room, are signs that it is working – cranking out one risk-laden emergency after another. The generator compensates for its relative weakness with the fact of its indestructibility and its readiness to stir up trouble whenever and wherever needed.

In conversations with Americans, I am surprised at how they regret their inability to keep Russia out of the New World Order. But that Order is essentially one of global containment. That system includes everyone while restraining each in a way that serves the interests of all. It is impossible to build relations with Russia that are separate from the world order.

The greatest danger to the modern world is if a sovereign state possessing a huge arsenal of weapons of mass construction were to become uncontrollable. The only three countries capable of posing such a hypothetical threat are the United States, China, and Russia – each of which has very different nuclear capabilities. Only those three states are capable of deliberately upsetting the global status quo with a single, heavy-handed act of abandon. Of course, that could only happen under yet unimagined circumstances – but such circumstances have never been conceivable beforehand. It is therefore the goal of the future world order to contain all three of those states. Without that ability, the very idea of a world order loses any meaning.

Containment is like the strong exoskeleton of control that compensates for the lack of internal political integrity. But if to consider the benefits of containment as it applies to Russia, why limit that discussion to Russia?

The eight-year run of Obama’s peace-loving administration follows the less successful imperial escapades of former U.S. President George W. Bush. The fear of a Donald Trump presidency that has gripped the U.S. establishment – not unlike what happened in Russia in 1996 – has caused a mobilization of the masses intent on doing whatever it takes to keep out evil.

The world is just as interested in the soft containment of the U.S. as it is in supporting its positive contribution – if not outright leadership – in various sectors. In any future world order, Russia will, by default – with or without Putin – remain a restraining factor against the U.S. on a par with the European Union and China. Even the conservative structures of NATO and the United Nations to some extent serve as constraints against U.S. hubris.

Russia’s military intervention in the Syrian conflict prompted the formation of a “lesser UN” of sorts in the Middle East that includes Turkey, Saudi Arabia, the United States, Russia, Iran, China, and the EU.

The series of ongoing crises has effectively become the new world order. The situation in Aleppo is nothing but bloody chaos for its residents, but for the major powers, it is the venue of their interaction and the architecture of their mutual deterrence.

Russia has lost its previous frame of reference. It needs a new one for the sake of future progress. Russia needs support for what appears to be a budding effort toward modernization – one very unlike the previous attempt. And such support should be conditional upon a certain framework.

However, Russia will not accept all forms of support, and not all should be offered either. Threatening new sanctions against Russia, with their attendant financial hardships, will only force Moscow to increase its dependence on Beijing. Ideally, the United States could somehow reduce the risk of that happening by proposing some sort of triangular containment in which Russia would take a natural interest. Of course, that could only happen in the context of multilateral relations in the Far East that involve other countries as well.

Many observers complain about the lack of “transparency and trust” between our countries. It should be understood, however, that the Russian state is currently focused exclusively on “generating distrust” toward other countries – and as a result, toward itself. Moscow would have to first slow down its “generator” in order to exercise restraint. And Russia is unable to entirely abandon its distrust of the world – in which it plays no significant role other than its occasional “special ops.” It is therefore useless to demand that Moscow show good faith or transparency up front, as a precondition to further talks.

It is impossible to contain Russia without involving it in the world order. However, a world order that cannot guarantee containment of all of its most powerful members is not only useless, but also dangerous.

From –