The Latest Stratfor Predictions for Russia

I’m no doubt a few days late to the party in commenting on the latest Stratfor predictions for the coming decade of 2015-2025, but given they’ve made some very bold predictions about the future of Russia I’m willing to throw in my two kopecks worth. For those who haven’t read the latest report, you can see it here. For those of you who have, you’ll know that they “expect Moscow’s authority to weaken substantially, leading to the formal and informal fragmentation of Russia.” Going into further detail, they predict that “To Russia’s west, Poland, Hungary and Romania will seek to recover regions lost to the Russians at various points. They will work to bring Belarus and Ukraine into this fold. In the south, the Russians’ ability to continue controlling the North Caucasus will evaporate, and Central Asia will destabilize. In the northwest, the Karelian region will seek to rejoin Finland. In the Far East, the maritime regions more closely linked to China, Japan and the United States than to Moscow will move independently. Other areas outside of Moscow will not necessarily seek autonomy but will have it thrust upon them. This is the point: There will not be an uprising against Moscow, but Moscow’s withering ability to support and control the Russian Federation will leave a vacuum. What will exist in this vacuum will be the individual fragments of the Russian Federation.” And the final part that caught my eye was in the discussion on East Asia, where they predict that “China cannot easily turn nationalism into active aggression. China’s geography makes such actions on land difficult, if not impossible. The only exception might be an attempt to take control of Russia’s maritime interests if we are correct and Russia fragments. Here, Japan likely would challenge China.” and that “Fighting over the minor islands producing low-cost and unprofitable energy will not be the primary issue in the region. Rather, an old three-player game will emerge. Russia, the declining power, will increasingly lose the ability to protect its maritime interests. The Chinese and the Japanese will both be interested in acquiring these and in preventing each other from having them. We forecast this as the central, unsettled issue in the region as Russia declines and Sino-Japanese competition increases.” These three points are all connected, and I’ll address them in two parts.

The Collapse of Russia

The starting point of these predictions is that over the next decade, due to pressures on the economy and the ruble, the current political and economic structures of governance within Russia, and the decline in influence of central government and the security apparatus, the Russian Federation will formally and informally decline to the point of collapse, with the federation splitting into numerous smaller, independent entities. I’ll note that they don’t explicitly say the federation will split up, but when you predict that various territories will leave, including large swathes of it, you can only mean the end of the country as we know it. Based on that, I’m writing from the belief that they predict the end of Russia as we know it. It’s not a new prediction, infact it’s almost becoming a cliché that every now and then the collapse of Russia will be highly anticipated and grossly exaggerated. Whether it’s political collapse, economic collapse or demographic collapse…you name it, the books and articles have been published predicting it. Even a cursory look at history however will show this to be highly unlikely. Since the turn of the 20th century alone, Russia has faced and seen off internal revolutions, civil war, a failed socialist experiment, foreign invasion, the collapse of the Soviet Union, economic crashes, demographic challenges and various economic and political sanctions. And yet there she is, in all her glory, still standing and coming back for more. If a century of cyclical turmoil, and particularly in eras where technological capabilities were lower and the central government had less ability to unify the country through national ideals and opinions, it’s difficult to see how anyone can predict the collapse of Russia within a decade. Notwithstanding a spectacular natural disaster or a massive military defeat and forced partition, the latter of which in the past has failed to split up the core areas of the country for any meaningful length of time, Russia will still be here in a decade.

However, let me focus more specifically on the crux of the argument in the report: “Given the organization of the federation, with revenue flowing to Moscow before being distributed directly or via regional governments, the flow of resources will also vary dramatically. This will lead to a repeat of the Soviet Union’s experience in the 1980s and Russia’s in the 1990s, in which Moscow’s ability to support the national infrastructure declined. In this case, it will cause regions to fend for themselves by forming informal and formal autonomous entities. The economic ties binding the Russian periphery to Moscow will fray.” At the outset it’s an argument based on certain ideas of how states operate. When things are going well and the centre is strong, periphery regions or minority nationality regions go with the flow, enjoying the success and wealth that association in the state brings. This argument has been used to analyse a number of countries, from the UK, to Italy, to Malaysia at the time when it included Singapore. When things aren’t going so well, those periphery and minority regions become unhappy and start doing things on their own, or even pushing for their independence. We’ve seen it recently with the Scottish independence referendum, the cycles of tensions in Italy between North and South, and the racial and economic tensions that led to Singapore’s independence from Malaysia. The problem with using this starting point to view Russia is that it doesn’t take each region as a separate entity, it doesn’t acknowledge that most regions are Russian-majority regions, and it doesn’t take note of geography. Of all the Russian regions, only a handful are not a Russian-majority. Most of them are in the Caucasus area, with the exceptions being Bashkortostan, Sakha and Tuva. Undoubtedly it’s credible to imagine the Caucasus areas being comfortable settling for independence if Russia was collapsing, but Bashkortostan and Sakha are in very unfavourable geographic locations for independence, are very comfortable with identifying as a minority race but still being Russian, and have very different interests from each other. Tuva is the only one of those three outliers with a history of tension towards Russians, and of existing outwith the Russian Federation. The second problem I have with their argument is that it specifies the periods of the 1980s and 1990s, with the collapse of the Soviet Union and the tensions between centre and periphery becoming more prominent. I agree that there were tensions between centre and periphery, but I think they’ve failed to learn some of the lessons on why these movements ultimately failed to succeed.

When the authority of a central government weakens or loses the ability to adequately finance the regions, those regions by necessity have to take on some level of autonomy to get day-to-day things done. Pay bills and wages, ensure the smooth running of imports and exports, secure their borders, maintain local law and order…countless number of things really. In the Russian case, the economic issue was huge. When you add in the levels of corruption that were prevalent in Russia at the time, it was devastating for many regions and citizens rightly were furious and demanding changes. What you rarely saw, outside of the Caucasus, was any movement towards independence. Some regional leaders hinted at it, in the Russian Far East this was predominantly Mikhail Nikolayev of Sakha and Yevgeny Nazdratenko of Primorskiy, but crucially they never tried to implement it. The threat of separatism was a bargaining chip, an emotional lever, a populist statement, and a way to try and pressure more finance and influence from central government. Very quickly after these pressures reached a crescendo, larger republics like Sakha and Tatarstan received further benefits in deals with the central government, and soon thereafter gave more support to the centre. Even after the financial pressures in Russia from 1997, with the drastic decline of Yeltsin, and the military failures in Chechnya, the regional alliances had a chance to achieve greater autonomy or independence. But when 1999 legislative elections arrived, the elites abandoned their support for the ‘Fatherland – All Russia’ party at a late hour (as well as a lot of good PR for Unity Russia in the media, admittedly). By 2001, they had merged with Unity Russia to form United Russia.

Why this collapse and change of heart, just when it seemed they had reached a new level of political strength? Because what the elites really wanted was not autonomy, nor independence, nor a collapse of the Russian state. They opposed the central government because it was weak and they did not consider that it would create a solid future for Russia. When the elites knew that changes had arrived in the political landscape, they saw the strength and unity they had hoped for. He gave them a vision and they believed in it. Much like the average Russian citizen, the elites generally love their country and want it to succeed. The latest Levada poll confirms some of those ideas that the strength of the government is more important than what western countries would consider democratic. Opposition politics is simply an outlet for when dialogue is needed with the government, and not as a system of changing the elites. Whether it works well or not, populations will usually go with the system that favours their national traits, and in Russia this requires more networks and strength than democracy and debate. ‘Sistema’, if you will. Ultimately, no matter the troubles Russia may face in the coming decade, as long as they have leaders at the helm with strength, determination and a vision, the Russian elites and the general population will stick together, for better or worse. Never underestimate the ability of an ethnic group to stick together in tough times.

Various Regions Will Secede or be Absorbed by Other States

The second quote I picked out from the report was the suggestion that Central and Eastern European states will attempt, in the face of a Russian collapse, to take back territories they feel were historically theirs. In addition to this, the Caucasus will go it alone, Karelia will try to join Finland, the Central Asian states will destabilise, and a number of the Far Eastern regions will join together in an independent state. The third quote I feel is a continuation of this, wherein Japan and China both see the Russian collapse as an opportunity to absorb some areas of the Russian Far East, presumably the Amur and Primorsky regions for China, and the Kuril Islands for Japan. Some of these suggestions I feel are actually more credible, but only if you can stretch your imagination and believe that the extremely unlikely first premise comes to pass. Nevertheless, I’ll address some of them. I won’t discuss Central and Eastern European thoughts on reclaiming territory as it’s not my region of expertise, and neither are the Caucasus, Central Asia or Karelia. You can make up your own mind on those, though in short I think that Karelia isn’t very likely whereas the others might be. The Far Eastern ones are more interesting. I’ve accumulated what I would consider, at a minimum, a decent knowledge of the history and present of places like Vladivostok and Khabarovsk. I’ve followed the evolution of events from their starting development to modern attempts at development and economic growth with Asian countries. In my view, the level of support for independence here is extremely low. Even when I’ve played devil’s advocate and brought up periods like the Far Eastern Republic in conversation, people either don’t know, don’t care, or don’t want to see it happen again. There are no opinion polls showing a critical mass or even a significant minority of support for it. I’m sure there are a few patriots out there, but I’m not finding them. Going by that, and the fact that even regional elites have ceased all talk of independence since the populist days of Nazdratenko, I consider it extremely unlikely that a voluntary independence movement would form here.

If it was somehow enforced by a Russian collapse outwith their control, I would also find it hard to imagine that they would happily be absorbed by China or Japan. There are still a lot of military units out this way that would feel the same, and I doubt China are going to sacrifice countless soldiers to make it happen. Although the population of the Russian Far East is also relatively small, you would be absorbing an unhappy population of a few million people who don’t speak Mandarin, have no cultural connections to China, and require massive spending to bring their regions up to scratch. There are just too many political and economic risks involved, with surrounding Asian countries all likely seeing it as Chinese aggression. As for Japan and the Kuril Islands, that’s more realistic, though I still can’t see it happening by force. For one, there’s the aforementioned military units the Russian Far East has to raise as a defence, combined with the limited ability of Japan to conduct an independent attack. Secondly, they would no doubt need the approval of the USA to make such a move, and I think even they would be reluctant to do it. There are too many possibilities for it to stretch into a larger war with China, or other nations who would be left with the principle of complaining about the Crimean accession to Russia and being faced with a similar movement by Japan with the Kuril Islands. On the other hand, I could see the diplomatic route as viable. If Sakhalin had to go it alone, there may well be enough of a financial incentive to give the islands to Japan in exchange for economic and diplomatic support, with the concept of inviolable Russian soil already having been lost. This is the only viable change I could see coming about in the unrealistic scenario, and I still think it’s not a certainty.

Summary

In short, I see the Stratfor predictions on Russia as starting from an unrealistic base, possibly an overtly biased one, which makes me see it as unlikely that the events will come to pass. I don’t know the underlying theories or analysis that make them think that these events will happen, but I’ve offered up my own thoughts based on analysis and personal opinion. The later parts of their predictions at least have a bit more realism, but are still unlikely in my view, and so I can’t recommend taking them as realistic. If you feel differently or have other views, feel free to leave a comment below. But if Russia collapses within a decade, I’ll eat my kilt.

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Land Reform in the Russian Far East

One of the developments that caught my eye recently was a proposal by Yuri Trutnev to Vladimir Putin on the 19th of January, in which he suggested that the government offer a free hectare of land to anyone willing to move to the Russian Far East. Putin was open to the idea and suggested putting forward a concrete proposal, as at this stage it was a very basic outline. Below I’ll set out the basics of it, and discuss the prospect further. If you want to read a follow-up interview with Trutnev on the issue first, check out this link. (Russian language)

What is the proposal?

In short, Trutnev has proposed that any Russian citizen should be entitled to receive one hectare of land free of charge for up to five years, possibly for three, after which time they can buy that piece of land at a concessionary price if the government/relevant authority deems they have used it properly. He proposes barring foreign citizens from taking part in this venture, or from sub-letting the land out once it has been allocated to a native. As an added bonus, he suggests that applicants can choose which exact hectare they receive using an online system. In a follow-up story, the governor of Magadan jumped on the idea and suggested his region offer five hectares, but since the proposal is at the drafting stage, these proposals await more concrete details. More importantly, people can use this land to engage not only in agriculture, but also in forestry, tourism, industry, hunting…any operation within the law basically. As noted at the start of this article, Putin supports the idea in principle, noting that previous initiatives have been employed in Siberia in the past.

Where will the land be available?

Everywhere in the Far Eastern Federal District, on government-owned land which is not currently in use. This includes the border areas with China along the Amur river, and presumably also the areas close to North Korea. However he does precludes areas situated directly around cities as he feels that ownership of land so close to large companies, transport and infrastructure networks, and prime land is too open to corruption. In saying that, only 1.18% of the available land falls into this category, leaving a lot of land available for the scheme. To put this in perspective, the government land holdings of various categories in the Far East amounts to about 614 million hectares.

What if the land is rented or sold on to foreigners?

In the interview, I’ve translated his response to this question as partially accepting that corruption is a high possibility, but that it would be of limited value since no substantial development could ever take place on the land as it would never be approved by the regional authorities.

What are his reasons for suggesting this initiative?

Trutnev believes that a lot of land is simply lying unproductive in the region, and is essentially wasted economic potential. The state is doing nothing with it, so he feels that others should get a chance to make a go of it. It sounds like he also thinks it may attract more able-bodied citizens to the region, noting that the population in the region rose slightly at the last count around the end of 2014 and as such it is becoming more attractive. Finally, he sees it as an experiment that could be useful in preparing for something similar to be rolled out across the whole of Russia, noting that even Western Russia has far too much unused land.

Background

One thing that stood out in some of the basic news stories was that Putin mentioned that major reforms had been carried out before in Siberia.  I don’t think he would have been trying to invoke any particular movement, and I translated his response as very cautious, but there is a general memory in Russia that major land reforms and developments have occured before. For those of you who aren’t familiar with the history, I’ve laid out a brief summary below.

Russia pressed forward into Siberia by the 16th century, but periods of internal strife in the country delayed any mass civilian movements east until the end of the century. Peasants started making their way into Siberia in the hope of settling on new lands and enjoying greater freedoms, particularly as the best lands were already monopolised in Western Russia. Tales of fertile soil had spread and families took the chance to claim it and make a bit more money for themselves. Perhaps just as enticing, the Tsar had set a far more generous tax system in Siberia, having permission to work five acres of land for every one acre they worked to pay the Tsar, and getting a 10-year tax-break to boot.

This situation petered out for a while as the best lands in Siberia started to become full, but when the Trans-Siberian Railway and other branch lines were completed near the end of the 19th century, migration to Siberia once again increased, with up to 10 million peasants making the journey east. This was encouraged by Tsar Nicholas II and his commissions, occuring during the period of the Stolypin reforms, and are perhaps the most remembered of Russian agricultural reforms by the modern world. Essentially those who were willing to go east were offered various benefits, receiving about 16 hectares of land per person. As with previous migrations they received small sums of money, tax-breaks, and help with their initial resettlement.

The next major reforms were during the Stalin era, carrying out dekulakisation and collectivisation. Not only did this take land mostly out of private hands, and turn the countryside into mass state-controlled farms, it also resulted in the death or exile of many skilled farmers. Agricultural potential and efficiency suffered due to this, but after the death of Stalin, another of the most famous reforms was carried out by Khrushchev; the ‘Virgin Lands’ campaign to settle and farm areas in Southern Russia, Southern Siberia and Northern Kazakhstan. This wasn’t really a reform in the traditional sense, as peasants weren’t given benefits and incentives to move east, it relied on the enthusiasm of Soviet youth to head out and settle these areas as part of the great drive to build the future in the present day. A few hundred thousand volunteers headed south and east resulting in early gains in output, but with time the campaign petered out, soil was overused, and eventually it was considered a failure.

Although later Soviet years didn’t see any substantial agricultural reforms, the economic focus on the city helped the nearby rural areas in unintended ways. Those farming areas close enough to growing and prospering cities were able to develop transport and trading links to the cities, resulting in benefits to both sides and an expansion in agricultural output in those areas. Unfortunately for these areas, the economic decline in Russia throughout the 1980s saw the agricultural areas also suffer as cities began to see a downturn in fortune. By the 1990s agricultural areas continued to collapse in productivity due to the structural problems and car-crash economics that followed the end of the Soviet Union and the beginning of Russia under Yeltsin. It highlighted just how dependent the rural areas had become on thriving urban centres, and perhaps in that lies a seed of a lesson for the contemporary attempts to develop the Russian Far East.

Will the current proposals work?

Until final proposals are put forward, it’s difficult to say for certain, but based on the ideas Trutnev discussed in the interview I linked to at the start of this article, I’m very sceptical on the plans and I think they’re highly unlikely to succeed. For one, the overwhelming majority of people in central and western russia have no intention of moving to the Russian Far East, and they certainly don’t harbour dreams of moving east to become a farmer or a hunter. Most of the able-bodied generation in contemporary Russia enjoy the comforts of modern life, living inside or in close proximity to cities and amenities, and in general they may well be ill-prepared and inexperienced for such a venture. The fact that the proposals restrict the offer to one hectare, and preclude offering land in the areas closest to the city which would be beneficial for production and supplying finished goods to the cities, is likely to be a major drawback. Even for those who don’t need to be close to a city, there would be major logistical and transport issues around the coldest parts of the year when roads are not always safe or available.

Compounding the issue of getting people to move east is plain and simple economics. It’s one thing to get the land for free, but you also need capital to invest in it and get it started. You might need to build a home on the land, and at the very least you’ll need to buy storage facilities and security measures if you don’t live there. You’ll likely need some mechanised equipment to make efficient use of the land, and even if you want to get into a non-agriculture industry you’ll still have numerous start-up costs. Without an accompanying grant, tax-break and financial support this will be a prohibitive venture. Those who are making money aren’t generally going to take a punt on one hectare of land, and those with no money can’t afford to take the chance. Given the current financial restrictions in Russia, low-income citizens aren’t likely to get large loans from a bank either.

On the issue of corruption, although foreigners are prohibited from taking advantage of this offer, it’s not difficult to see that areas close to China could be rented illegally from natives by individual Chinese farmers or collectives, farmed, and the products then sold in Russia or China. The China Daily has already speculated on this, and whilst any meaningful development on each hectare is still unlikely through corruption, most of the fertile areas are close enough to the border that it could still undermine the initiative. Whatever Trutnev puts forward in a concrete proposal is really going to have to have some plans to minimise this possibility. (Note, this is in no way suggestive of a Chinese invasion and annexation of the Russian Far East. That myth has been debunked enough times that I’ve no intention of addressing it here)

The only positive way I could see this idea playing out is if the 1.18% of available land close enough to cities is included in the initiative, as the vast majority of the suitable land is located in the south of the region, around the Amur, Khabarovsk, Primorsky and Jewish Autonomous Oblast regions. This is important for the reasons I alluded to a bit further up, where Russian agricultural areas received a boost when the cities they were close to also developed. It is vital that the cities develop in the Russian Far East if the agricultural side is to prosper as well. Good ideas shouldn’t be discouraged, but until the major cities of Vladivostok and Khabarovsk develop and start to thrive, the areas around it will continue to struggle. Develop the cities, and the agriculture will develop with it, even if it’s through foreign investors rather than native Russians. Where there is demand, supply will surely follow.