By Jonathan Chevreau
Over the holiday break I’ve been reading about Russia and its president, Vladimir Putin, who came to power at the turn of the millennium. As one of the three books flagged below points out, Russia is the only power that has the capacity to destroy the United States in a nuclear strike. Those who assumed the west “won” the Cold War when the Soviet Union collapsed in 1991 should keep reading. From Ukraine to the War in Syria and the battles over gas pipelines and the plummeting price of oil, Russia is very much in the news as we enter 2015. It’s a fascinating story in itself but investors will find it of particular relevance.
Before his surprise appointment by Boris Yeltsin, little was known about the former KGB (now FSB) operative, which is why Masha Gessen titled her 2012 book about him The Man Without a Face. Subtitled The Unlikely Rise of Vladimir Putin, the gutsy Moscow-based veteran journalist pulls no punches about the true nature of Putin’s Russia.
She traces Putin’s formative years in a chapter entitled “Autobiography of a Thug.” As she chronicles how the “Accidental President” rose to his current seemingly unassailable position at the pinnacle of power, she dedicates entire chapters to how the Russian media “died” to be replaced by state-owned television; to the dismantling of democracy, a rule of terror and the “insatiable greed” of the top circles of Russia, where the politicians also own the largest businesses, many of them (like Gazprom from the ashes of Yukos), the result of theft.
The following quotes are typical:
Russia (has) become the opposite of a liberal economy: an unfree, warmongering state ruled by a corporate group …. Putin has claimed his place as the godfather of a mafia clan ruling the country … Like all mafia bosses, he has amassed wealth by outright robberies, as with Yukos …. … Putin’s Russia is a country where political rivals and vocal critics are often killed, and at least sometimes the order comes directly from the president’s office …
Putin’s ascent was greatly facilitated by the energy industry and rising oil prices, which makes the recent dive in oil prices relevant. A more recent book, from 2014, is the revised edition of The New Cold War, originally published in 2008 by veteran Economist senior editor Edward Lucas. Subtitled Putin’s Russia and the Threat to the West, Lucas essentially issues a wake-up call to a complacent west that may have imagined the original Cold War ended with Western triumph after the former Soviet Union collapsed in 1991.
The early chapters cover similar territory as The Man Without a Face: how the KGB seized power in Russia, how the Kremlin uses state power to stifle dissent, how the Russian form of capitalism (some call it “Gangster Capitalism”) is both Russia’s greatest strength and weakness, and how the front line of the New Cold War is Eastern Europe and the former satellite states of the Soviet Union. The later chapters look at the fascinating topics of pipeline politics and Russia’s foreign policy.
For now, consider these three quotes I’ve strung together:
The most catastrophic mistake the outside world has made since 1991 is to assume that Russia is steadily becoming a ‘normal’ country …. Russia is becoming a giant, nuclear-armed version of Saudi Arabia … In short, the West is losing the New Cold War, while having barely noticed that it has started.
Russia After Putin is a short monograph I downloaded on my Kindle for just US$2.99 and published by United States Army War College Press in May 2014. Author Richard Krickus imagines four possible scenarios of Russia with or without Putin extending past the year 2020.
The first two scenarios are relatively benign: one is called “The Status Quo” and the second “The Western Path to Development.”
The second two scenarios Krickus describes as “Malignant.” The first he describes as “Stalin Lite,” the second is “Russia in Chaos.”
… he wants to reintegrate former Soviet entities back into Russia’s clutches and to deny the West the capacity to integrate them into the EU and NATO … While Belarus and Kazakhstan are deemed important to Moscow, control over Ukraine is a must for Russia.