Russia: Kremlin Tightens the Belt

The Kremlin continues to battle the effects of the global economic slowdown on Russia, and this time, President Dmitry Medvedev is setting an example by planning to cut into his administration's budget and personnel. By March 1, all major administration departments must present the plan to Medvedev's assistant on how they will cut their expenses. There are also concrete plans to cut up to 100 staffers from the Administration's payroll. Earlier, the Russian President said that in tough economic conditions, "... we must start with ourselves; President's Administration is not a large organization, but it must lead by example." Currently, Medvedev's offices employ approximately 1,600 people across the country, and the outgoing 100 are most likely going to be staffers close to retirement or those working in various regional offices.

In order to stimulate its flagging economy, Russian Ministry of Economic Development has put forth a plan to Prime Minister Putin in order to support greater competition within the country. The plan, developed 'till the fiscal year 2012, will be supported by specific anti-monopoly legislation, which is being developed by both chambers of Russian Parliament. According to Putin, this legislation "should give the Federal Anti-Monopoly Service greater authority to interdict unsavory business practices and the abuse of monopolistic behavior on the market, but at the same time it should free entrepreneurs form excessive controls." The plan will devote special attention to so-called "natural monopolies" and should simplify taxation of Russia's financial systems in order to stimulate financial trading in the country. Until recently, "natural monopolies" included Russia's oil, gas, metals, energy and certain industrial and armaments entities that so far contributed the most to Russia's economic growth. The government plan also seeks to simply access to the natural monopolies' infrastructure, as well as lowering the cost of access to electric grids and small business participation in state orders.

While Russia struggles to steady its economy and come up with ways to instill confidence in its domestic market, many leading Russian policy experts put the blame on the ongoing crisis at the feet of the "global elites", emanating from America. Aleksei Pushkov, Director of the Institute of International Affairs at the Diplomatic Academy (Ministry of Foreign Affairs) and Professor of the elite Moscow Institute of International Relations (MGIMO), states that the global financial elite feels the responsibility for the ongoing crisis, but refuses to talk about it. "At the recent Davos Economic Forum, many leading officials and managers of the global banks and financial institutions simply did not show up. There was a feeling that the very model of global capitalism developed over the last three decades is itself in crisis."

He further stated that "here, we are talking about the neo-liberal model of development. It was believed until recently that globalization and global economic integration will create conditions for the uninterrupted growth of economic well-being. In practice, however, it contributed to the spread of America's financial crisis all over the world. It was globalization that spread the virus that first struck the U.S. economy." Professor Pushkov also thinks that America's attempts at creating global hegemony and uni-polar world have crumbled: "The neo-liberal economic model manifested itself in politics after the fall of the Soviet Union and the end of the Cold War. In 1991, United States was saying that it remained the only global leader. Then-president George Bush was talking about the New World Order. Even in the United States, it is now acceptable to talk about this uni-polar "moment" that lasted 'till about 2003-2004, when America overestimated its capabilities and begun its policy of regime change in the Middle East, starting with Iraq. That "moment" lasted about 10-14 years and came to and end during the presidency of Bush Jr. Barack Obama is a president of universally accepted 'multi-polar world.' By electing him, America showed everyone that it is refusing to be the hegemon. If the country thought differently, then the next president would have been John McCain - the continuation of George W. Bush policies."

Russia continues its plan for decreasing economic and military-industrial cooperation with Ukraine. This was confirmed by the Vice Premier Sergei Ivanov, who remarked that Moscow is not able to unilaterally break its defense cooperation with Kiev. "We continue to depend on each other, since the Russian-Ukrainian cooperation in the defense industry was developed in the Soviet years," said the former head of the Defense Ministry. "But even before the Georgian aggression [in August 2008], there were adopted a number of measures aimed at ending the industrial and military-technical cooperation with Ukraine. This is an inevitable process, as we see what is happening with our neighbors. We cannot take risks, especially given the desire of the Ukrainian leadership to join NATO."

This past Wednesday at the Kremlin, President Dmitry Medvedev met with the President of Yemen Ali Abdullah Saleh. The outcome of the negotiations was Yemen's desire to assist Russian ships involved in the fight against piracy in the Gulf of Aden. "We would like to talk about what is necessary to continue providing the Russian warships with all necessary facilities in terms of countering piracy in the region," said Saleh. Yemeni President stressed that "the issues of countering the pirates are of great importance to Sana'a." For this purpose, Yemen will host a regional center dealing with anti-piracy efforts. President Saleh also remarked nostalgically that ".... we have longstanding friendly relations with Russia. I am talking about those long-standing relationships that bind the Arab world, including Yemen, yo the Soviet Union." Throughout the Cold War, Yemen was divided into a communist South Yemen and a pro-Western North Yemen. In the 1970s, Soviet Navy gained access to South Yemeni facilities and maintained military presence in the Gulf of Aden. The country was eventually peacefully unified in 1990, as the Cold War was coming to an end.