Even when oil prices were that low, some companies continued to invest in the development of fields because “sometimes, the correct strategy is not to react to the crisis but to act according to the plan one has set.” Not all companies are in a position to do that, and in reality in Russia, those among major firms that could are “extremely few.”
When oil prices were high, many of them got used to acting as if they would always be that way, and the government assumed that its best strategy was to monopolize them and expand abroad rather than to develop the branch and the economy at home as a whole. Now it is paying the price for that miscalculation.
If oil prices continue to fall, Lyats says, there are some obvious steps that the Russian government and Russian firms must take. First of all, they must cut costs. The government must cut fees or even eliminate them altogether so that corruption will be reduced; and firms must become more competitive and efficient.
That will involve cutting salaries and wages in the oil and gas sector, something that will have a snowball effect both in other sectors and on government incomes. But once the shocks have been absorbed – and they can be, the Moscow analyst says – the country will be better off for the future.
This all can be achieved, he suggests, by “a broad, decisive and well-organized deflation” and by reducing the role of the state in the economy so that bureaucrats and officials won’t be able to act as parasites on the economic activities of others via licenses, fees, and corrupt activities, he continues.
Indeed, Russia should be ready for a new round of even more serious privatization, something that could be promoted by “decriminalizing economic crimes” and the selling off of many state companies whose managements have been anything but competent, having grown fat and lazy in the times of high oil prices.
Another step Moscow should take is one that the US took 40 years ago: it should prohibit the export of oil, a step that would not only drive prices up, a trend Russian firms with oil interests abroad could exploit, but also have the effect of forcing the petroleum sector in Russia to investing more money in oil processing firms, whose products are in every case more valuable and profitable than oil itself, especially when the latter is so cheap.
Some ideas now being floated won’t work, Lyats says. The defense industry won’t be a driver of growth, he says. “The Soviet Union clearly showed that.” Instead, the growth of defense firms will simply become yet another way for officials and their allies in business to raid the treasury.
“There must be a privatization of [Russia’s] military-industry complex” just as there must be one in the civilian sector. Any further monopolization will only promote “the degradation of thought and production. Not everything in this regard is now visible, but in the medium term, our backwardness will become ever more obvious.”
One sector the government should be promoting, the Moscow analyst continues, is nuclear energy, but even more important, it should be investing in transportation and logistics both for the domestic market and for Russia’s role as an emerging transportation hub between Europe and Asia.
Summing up, Lyats says that “the prospects of the fall of oil to below $10 a barrel are not a threat but the last chance to change things for the better, to stop fattening snobs and bureaucrats and to get involved in real production within the country, to change its approaches to spending and in general to become more tight-fisted, economic and effective.”
By making that reference, the Regnum editors intentionally or not have raised a question that many have preferred to forget: the USSR might have expanded in exactly that way if Lenin had lived because Lenin believed that the borders of the USSR should expand to include all countries that had had a socialist revolution in them.
But in fact, it expanded to the borders that it had at its end because Stalin believed that non-Russians who had not lived under the Russian Empire would not tolerate being part of a Russian-dominated state for long. And consequently, he did not move to include within the USSR countries that had gone socialist in Eastern Europe, Asia or Latin America.
Stalin violated his own view only when he occupied Western Ukraine, Western Belarus, and parts of what is now Moldova and when after a gap of 25 years re-imposed Russian rule in the Baltic countries, and it was these violations that almost certainly contributed to the demise of the Soviet Union in 1991.
Had Stalin moved the USSR’s borders further outward, the Soviet Union likely would have exploded even earlier; but if it had survived in the form Lenin wanted, it would not be a Russian-dominated system but rather one in which the majority of its population would be speaking Chinese, certainly something that would give even the most pro-Soviet Russians pause.
The fight between Lenin and Stalin took place largely out of public view. In his draft theses on the national colonial question for the second congress of the Komintern in 1920, Lenin outlined his view that as the revolution spread, so too should the borders of the Soviet state, an idea that the Red Army’s invasion of Poland may have made appear plausible.
Stalin registered his objections in two code cables, one of which was published in Soviet times only once and by someone who did not die in his sleep, as a result as a footnote in the third edition of Lenin’s collected works and one of which remained unpublished until after the demise of the USSR.
In both, Stalin made clear that national identities would remain powerful even after a socialist revolution and that trying to impose Moscow’s control on those who had never experienced Russian rule before would be a mistake. He said that the Poles would never accept Soviet RUSSIAN rule and that the same would be true elsewhere.
In the event, Lenin was incapacitated and died not long after the USSR was formed, and Stalin was able to put his ideas into practice, ideas that gave birth to a world socialist system in which there were many states not one with the kind of diversity that he had no intention of allowing within the Soviet Union.
His list is as follows:
1. In a Crisis, Russians Urged to Eat Less. Ilya Gaffner, a United Russia Duma deputy, suggested last January that Russians should respond to the crisis by eating less. By August, if he was paying attention, he would have discovered that 60 percent of Russians are economizing on food.
2. Legalize Gay Marriage Because ‘Love Works Miracles.’ TV personality Dmitry Kiselyev picked up on Vladimir Putin’s suggestion that Russians shouldn’t get worked up about gay marriage and proposed legalizing homosexual unions. After all, he declared, “love works miracles and who can be against that?” But the majority of the State Duma were.
3. Prohibit Those who Owe Fines from Getting Married. The state agency that handles the registration of official acts like marriage suggested that it should not register anyone applying to get married if he or she has not paid all government fines that have been levelled against them. That restriction apparently has not been put in place but those who owe now can’t leave the country.
4. No One Should Earn More than Putin. Oleg Nilov, a Just Russia Duma deputy, proposed that no Russian businessman be allowed to earn more than Vladimir Putin’s official and very nominal salary. Not surprisingly, neither business nor the government supported that.
5. Legalize Polygamy. Chechen officials say that polygamy should be legalized in Russia becxauase “if a man can support another wife, then why not?” Muslim officials in Moscow suggested this would simply legalize existing relations and protect women. And Duma deputy Elena Mizulina said that it was “backward and stupid” to punish people for polygamy.
6. Moscow Urged to Burn Clothing Coming from Abroad. The head of Russia’s textile industry urged Vladimir Putin to extend his program of destroying contraband food to clothing as well and thus boost the earnings of textile workers. So far, there has been no public reaction from the Kremlin.
7. Duma Deputies Want Russians to Apply for Permission to Go Abroad. Any Russian who wants to travel abroad should have to apply for an exit visa. The idea has support in the government even though officials say that they will not use such an arrangement to limit the freedom of Russians to travel.
8. No Vodka on Fridays. A Moscow deputy, Aleksey Mishin, has called for officials in Moscow to ban the sale of alcoholic beverages on Friday as a way of promoting sobriety. But neither the Moscow city government nor the Russian one have approved the idea.
9. Russian Parents Don’t Want Putin to Delay School Opening. Vladimir Putin suggested moving the first day of school from September 1 to September 15, but Russian parents were overwhelmingly opposed and the government has decided to leave the date where it has been at least for the time being and for primary and secondary schools.
10. Ban Language to Fight Terrorism. Aleksandr Ageyev, a Duma deputy, has proposed banning the Telegram messenger system because terrorists can use it to recruit people or direct their activities. The founder of Telegram responded that perhaps Russian should ban language because “there are indications that with the help of words, the terrorists communicate with one another.” Perhaps as a result, Moscow has left Telegram in peace, again for the time being.
Staunton, VA, December 30, 2015 — Moscow officials are furious that Turkey is showing support for the Crimean Tatars — especially given that most Western governments have shifted their focus to ensuring a continuation of the ceasefire in the Donbas and are not raising the issue of Russia’s illegal annexation of the Ukrainian peninsula as often as they did earlier.
If these continue, Klimov says, “Turkey’s ruling class will split,” and “the boomerang Erdogan has shown will certainly come back” – an implicit warning that Moscow may seek to destabilize Ankara and an indication of how sensitive the Russian leadership remains about Crimea and the Crimean Tatar activists who keep reminding the world about what has happened.
Vladimir Zharikhin, the deputy director of Moscow’s Institute for CIS Countries, says that no one should make much of Crimean Tatar claims that they are getting military uniforms from Ankara or other aid. Most of the items “are easily available from any retailer selling fishing gear,” he suggests.
The Moscow analyst takes the same hard line on Turkish-Crimean Tatar links. “In fact,” he says, “Islyamov and Chubarov are agents on the payroll of the Turkish intelligence service. But both are generals without an army. The Tatars who live in Ukrainian territory next to Crimea need no extremists,” but “these two will keep trying to foment unrest with Ankara’s support.”
Staunton, VA, December 30, 2015 — Today, Rais Suleymanov, a Tatar who has sharply criticized Kazan for supposedly assisting the rise of radical Islam in the Middle Volga and for failing to break with Turkey after the shooting down of a Russian plane that violated Turkish airspace, was detained for violating the Russian law governing the publication of extremist materials.