Monday, August 24, 2015
How Next Round of Russia’s Disintegration May Begin
Staunton, August 24 – In his poem, “The Fall of Rome,” W.H. Auden wrote that it could be signaled not by some dramatic event but rather by “a bored official” scribbling a note and leaving his office to go home, a reminder that enormous tectonic shifts often begin with small things that most dismiss at the time but that later prove to be the start of something big.
Today brings a report of one of those possible triggers of such great events. Andrey Nechayev, an economist and head of the Civic Initiative Party, reports that the Russian government’s grain purchase planned for August 20 did not happen because farmers no longer want to take rubles for their grain (echo.msk.ru/blog/nechaev/1608922-echo/).
Instead, he writes, because the devaluation of the ruble has the potential to boost grain exports, Russian farmers would rather sell their production abroad for dollars than to accept the prices Moscow offers in ever-weakening rubles, an “unexpected” blowback from the devaluation of the rule.
And then Nechayev underscores why this may matter more than many expect: “Something in part similar happened at the twilight of the USSR when then-collective farms refused to supply grain to centralized funds” and demanded that they be paid not in Soviet rubles but in then-rare hard currency.
The government didn’t; instead, it resorted to “deception.” But “everything ended with colossal problems for the supply of food to major cities and at the end in the disintegration of the country, since a majority of republics considered that they could resolve the food supply problem better individually than collectively.”
That, the economist says, should be “a serious lesson” for today.
The prospects for the disintegration of the Russian Federation are attracting more attention in the wake of an interview former US Secretary of State Henry Kissinger gave to “The National Interest” in which he suggested that the United States was mistakenly pursuing a policy intended to split Russia apart.
In today’s “Nezavisimaya gazeta,” Mikhail Sergeyev, that Moscow paper’s economics specialist, considers Kissinger’s words, as well as the comments of several Russian experts, and concludes that “signs of default separatism” of the kind Russia faced in 1998 “are not yet being observed” (ng.ru/economics/2015-08-24/4_defolt.html).
After summarizing Kissinger’s arguments, Sergeyev points out that “the Russian Federation and the USSR have already demonstrated a tendency toward disintegration,” with the country having fallen apart “at least twice,” in 1917 and 1991. And at the time of the 1998 crisis, “numerous signs of economic separatism appeared.”
“The clearest examples of economic separatism,” he continues, were “the attempts at issuing regional currencies, the creation of oblast gold and hard currency reserves, and a refusal to pay taxes to the federal budget.” These were all serious, but Moscow was capable of suppressing them.
The “Nezavisimaya gazeta” analyst cites Emil Pain, a leading specialist on ethnicity and a former advisor to the Russian president on what happened 17 years ago. Pain notes that “after the federal center declared default, almost all the regions began to take measures of economic self-defense.”
By September 1998, for example, 79 regions had introduced price and export controls on food.” The greatest threat from that time, one “even stronger” than the regionalist movements in the early 1990s, came from the separating out of regional financial systems, Pain says; and Moscow had to work hard to bring the regions back into line.
Russian experts, Sergeyev says, point to differences between the current crisis and the 1998 default and “also to the difference in the approaches of the West to Russia today” as compared to “the time of default.”
Aleksey Arbatov, an IMEMO expert on foreign policy, says the 1998 default was the result of macro-economic miscalculations by the Russian government. The current crisis reflects the export-raw materials model having reached “a systemic dead end.” At the same time, he points out that “far from all politicians in the US seek the splitting up of Russia.”
“The majority of Americans understand that the dismemberment of the Russian Federation could have catastrophic consequences for the US. The remnants of Russia” might end up part of ISIS or China, and “the disintegration of the country with nuclear potential, atomic energy and numerous dangerous forms of production creates risks of a most serious catastrophe.”
Fyodor Lukyanov, head of the Russian Council on Foreign and Defense Policy, says it is “incorrect” to consider Kissinger’s comments as pointing to “possible means and methods of splitting Russia.” What the former secretary of state is talking about, he argues, is the choice by the US “after the cold war to adopt a policy of domination without taking the interests of our country into account.”
And he says that “the crises of the 1990s were generated by the incapacity of the Center. Then the regional authorities simply prepared themselves to survive independently. When the threat of the deepening of the crisis passed, the local bureaucrats forgot about economic separatism.”
Lukyanov says that he “does not foresee in the current conditions that things will develop toward a repetition of the scenarios of the 1990s.” At the same time, however, neither he nor Arbatov acknowledge that the arguments they are making now resemble all too closely the arguments the defenders of an integral Soviet Union may 25 years ago.