Russia Takes On Greenpeace—and Stakes Its Claim To The Arctic

The private investment needed to replace the government spending, he wrote, isnt coming, in part because investors have an “understandable lack of trust in public institutions.” Besides, private business has a hard time competing with state-owned behemoths: State-controlled banks, for example, hold 53 percent of the Russian economy’s entire loan portfolio. “We are at a crossroads,” Medvedev wrote. “Russia can continue going forward in slow motion, with economic growth close to zero, or it can take a serious step forward.” The second path “is fraught with risk,” while the first “leads to a precipice.” Few economists would argue with the diagnosis. “The head of the cabinet has largely learned to name the correct reasons for the country’s predicament,” Maxim Blant wrote on the opposition website ej.ru. Sergey Aleksashenko, director of macroeconomic studies at Moscow’s Higher School of Economics, agreed : “It’s a good thing that this has at least been said.” The biggest flaw in Medvedev’s lengthy program, critics said, was the paucity of solutions. All he offered was a slowdown in tariff increases at Russia’s state-owned utilities and some small-business support in the form of tax breaks, loans and government contracts. He also expounded on the need to turn Moscow into an international financial center. “And that’s it,” Aleksashenko wrote. “What about safeguarding property rights and the quality of the judicial system, shrinking the state and using government resources effectively, what about privatization and infrastructure?” Medvedev’s article does not contain the word “corruption” or mention capital flight, expected to reach $70 billion this year. It offers no specific measures to foster competition, the focus of the latest World Bank report on Russia. “Every month the Russian Statistics Committee surveys 25,000 entrepreneurs, trying to find out what obstacles they face, and every time they give the same answers: taxes, bureaucratic pressure, corruption,” Igor Nikolaev, head of strategic analysis at the audit firm FBK, told the web site Expert Online.

Ordering the Greenpeace ship to halt, the FSB began firing warning shots, first from their Kalashnikov assault rifles, then from their artillery cannons. A group of FSB agents then dropped down onto the vessel from helicopters and arrested at gunpoint all 28 activists and 2 journalists onboard. On Oct. 2, the Admirals message was hammered home by Russian prosecutors, who began bringing charges of piracy against the activists. If convicted, they face up to 15 years in prison. Vladimir Chuprov, the head of the Arctic program of Greenpeace Russia, admits that the timing of the mission, coming in the middle of the nuclear flotillas historic patrol of the Russian north, may have been inopportune. These [military] movements may have changed the way our mission was perceived, both in the eyes of the media and the security services, he tells TIME. A year ago, Chuprov points out, Greenpeace staged a similar protest on exactly the same oil platform, Prirazlomnoye , which belongs to Russias state-controlled energy giant Gazprom. Greenpeace activists even chained themselves to the rig during last years protest and refused to climb down. That time we were even more forceful, and the border guards did not react at all, says Chuprov. Indeed, no charges were filed last year against the Greenpeace activists.

Russia’s Growing Pains Not All Europe’s Fault

Theyve been spending on acquisitions and signing joint ventures deals from Vietnam to Venezuela, but their net income is falling. In 2011, their net income was $12.4 billion. In 2012, it was $10.9 billion. Forecasts for this year are better, at $11.4 billion, but falling to $11 billion next year and $9.7 billion in 2015. Falling net income constrains the capacity for Russian companies to fund investment projects which is one of the factors hurting demand for investments in Russia in the first place. Bad sentiment on Europe doesnt help. Last week, Prime Minister Dmitry Medvedev blamed much of Russias lackluster growth on the E.U., their chief trading partner. The European economy is teetering on the edge of recession, and has slowed growth in all BRICS countries. The U.S. economy cannot fully recover with high unemployment, and many individual Americans are just beginning to crawl out of debt, Medvedev wrote in the official address on the state of the economy on Friday, available on the Kremlins website if you can read Russian. During the G-20 meeting in St. Petersburg this month, Vladimir Putin even said the R word: recession is back on the table.

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