Wednesday, 1 February 2012

"It’s a complete myth that Putin’s Russia is stable"

The Robert Amsterdam website is one of the best sources of information about Russia. The interview with German businessman Franz J. Sedelmayer, who knows Russia and Putin better than most Europeans, is another proof of that:

In this exclusive interview, German businessman Franz J. Sedelmayer discusses his decades-long dispute with the Russian government, challenging Russia’s sovereign immunity, and the link between state corruption and the current environment of civil unrest in Russia.

I have picked a couple of excerpts from this must-read article.

Sedelmayer on Putin:

Well there is a nice phrase that describes what happened to Putin: “power corrupts, and absolute power corrupts absolutely.”
When I worked with Putin, he was known for two things: being honest and being loyal to his boss, who at that time was Mayor Sobchak. Putin would do absolutely anything for Sobchak, including covering up his corruption – and it was incredible, he did a very good job at it. It was this type of display of loyalty that eventually landed him his first top job in Moscow, and I think essentially that was the role he was originally expected to play by Yeltsin and his family.
If Putin would really be reelected as president in March 2012 he will, in order to stay in control for the whole duration of his term, restrict the freedom of the Russian people even more harsh; possibly to rival the situation as it has existed under the communists in the 1970’s. The Russian people are fully aware of that danger!
The crisis in Russia is not just limited to Putin the person, but the people who work around him. By nature, a dominant and charismatic personality like Putin is not going to surround himself with very capable people. That actually describes the whole situation in Russia today, whether you are talking about the FSB, the bureaucracy, or the nachalniki that control the cities and regions. These are not exactly the brain surgeons and rocket scientists of Russia – these are people who jumped on the bandwagon of Putin’s party, just like the same type of people who jumped on the bandwagon of the Communist Party for decades.

Sedelmayer on foreign investment in Russia:

 Look, the truth is that Russia’s image as a destination for foreign investment is terrible, and I don’t care about all the positive things that any Western government, including the United States, has to say about how great the country is, how it is moving in the right direction, etc. And the American “reset policy” in particular has failed miserably in bringing any progress to Russia that continues to fail to protect people’s property and freedom.
A normal businessperson today would not invest a dime in Russia. The only companies that are able to invest are multinational corporations of the size that they don’t care if they lose their investment. On the one hand, the investment is either relatively small in the terms of the company’s overall portfolio, and on the other, they don’t care if they lose the money because it is not their money but rather that of the shareholders. These guys can go out there and take all the risks, and then worry about handling the disputes among shareholders and auctioneers in the event that they lose the investment, but in no case are they making any investment that would cause the end of company. It seems strange some shareholders have not woken up to that reality, yet! But when you talk about small and mid-sized companies, there is no way they would take the risk to invest in Russia when there is no way to recover debts.

Sedelmayer on stability in Putin´s Russia:

It’s a complete myth that Putin’s Russia is stable. The lack of control over the country is the same as back in the Czar’s days – “the heavens are high and Moscow is far.” It is sheer logistics that do not allow a vertical line of power from the Kremlin to all the cities and the villages in the faraway regions, requiring Moscow to relinquish wide ranging discretion to locals.
What Putin has done essentially is to strike a deal with anybody in the regions that doesn’t step on his feet and or on the feet of the federal government, and then this or that governor or mayor is allowed to fill his own pockets without any oversight from the federal government. But the moment that they mount an opposition to the center, no matter how small it might be, Putin and his people will do anything possible to break it up.

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