Strong National Guard at home will allow Putin to more actively project power abroad
The author is an Italian industrialist and Honorary member of the Academy of Science of the Institut de France
As Leo Tolstoy wrote: "There is nothing stronger than those two: patience and time".
These are two of the most characteristic traits of the soul and psychology of the Russian people.
On the other hand, if you follow Sun Tzu’s strategic guidelines, whoever has time also masters space.
The Russian people are accustomed to suffering and sacrifice, as Vladimir Putin said, quoting Gogol, "The sharp word comes from the bottom of the heart."
Today this is perhaps the most rational way of analyzing the state of the Russian economy and its new geopolitics, starting with the Russian engagement in Syria in favor of Bashar el Assad and against the complex system of local and international jihad.
The slow but relentless increase in oil prices, organized by the oil and gas futures market during the current different, albeit parallel, crises in Iran and Saudi Arabia, is an important sign of rebound for the Russian Federation’s economy.
Furthermore, after the recent Doha summit of April 16, all oil market analysts predict that oil prices will increase rapidly throughout the second half of 2016 while investors cautiously maintain short term positions.
This is the result of a mix of factors such as the slow, but stable, global economic recovery and the planned decrease of oil extraction as a result of the decisions recently taken in Doha.
The Doha Summit failed because of the tension between Iran and Saudi Arabia, but all the latest OPEC projections point to a gradual increase in oil prices per barrel, although there are no explicit messages to that effect by the Vienna cartel. This means Russia’s accounts are stable and bound to improve, despite the severity of its recent economic crisis.
Since the beginning of 2016, inflation has been falling as a result of lower consumption.
In March 2016, however, Russian prices increased by 7.3% as against the previous year, after an 8.1% rise in February. Anyway Russian consumer prices are below market forecasts of 7.5%.
The current rate of Russian inflation is the lowest of the last two years, having absorbed the ruble devaluation by also allowing further easing of margins.
Nevertheless the drop in disposable income was over 5% in 2015, with rapidly falling wages. However, the share of the Russian population living below the poverty line is less than in previous years.
Russian poverty grew from 3.1 million needy people to 19.2 in 2015, the highest rate since 2006, but is now partially on the wane.
Again last year, wages and salaries fell by 2.6% on average, while the Russian Stock Exchange index (MICEX) grew by 7.9% according to the 2015 data.
All Western analysts maintain that the worst is over for the Russian economy. All Russian macroeconomic data and statistics point to a significant growth of exports throughout the second half of 2016, while the strategic link between the growth of the Iranian economy, after the JCPOA signature, and the increase in Russian oil and non-oil exports, leads us to believe that Russia used its military forces in Syria well, including with respect to the domestic economy.
The increase in oil and gas taxes decided in 2014 was in all likelihood, a rational solution. This 15% increase in the oil and gas taxes reduced the tax burden on other Russian productive sectors, more oriented to the internal market and, in the future, to exports.
Another rational Russian decision was to allow the ruble to fluctuate, saving on currency reserves and better absorbing the downward shock of oil prices.
More rubles for oil and gas units exported, prolonged the life of the reserve fund. The public deficit, already low by current Western standards, can be easily covered by the issue of government debt securities for the domestic capital market.
Basically the Russian economic crisis, which had been planned to "file Russian strategic nails" is now over, and the Russians’ infinite patience mentioned by Tolstoi will do the rest.
After the sanctions imposed on the Russian Federation in 2014 and the drop in oil prices, which have delayed recovery, the World Bank has predicted a slow improvement of Russia’s economy. A timid growth which, according to US analysts, will be based primarily on the fiscal and monetary policies of President Putin’s advisors.
Moreover, despite persisting sanctions, the Russian Federation is using the weak ruble to expand non-oil exports, which rose after the agreements between Russia and China and between Russia and the Eurasian Customs Union.
However, what is the link between the Russian economic adjustment underway and its current and future geopolitics?
Perhaps the key factor lies in the creation of a new political and military entity, namely the Russian National Guard, recently established by President Putin.
It merges various pre-existing armed structures and units, as many as 170,000 soldiers from the Ministry for Internal Affairs; an unreported number from the Ministry for Emergency Situations; 40,000 operational units of the OMON police forces, specialized in managing and suppressing riots; 5,500 officers of the SOBR rapid-reaction forces, in addition to the Operational Reaction Forces and Aviation of the Ministry for Internal Affairs, including the Zubr, Rys and Iastreb Special Forces units - at least 800 military men available for the new structure.
Therefore the total number of National Guard military staff will range between 250,000 and 300,000 strong.
The Guard’s tasks and functions will be managing and preventing problems of public order, combating terrorism and taking actions against "extremist" groups, namely the Chechen gangs and protesters in future "orange revolutions" likely to be planned by the West against Russia.
The Guard will be responsible for homeland defense and security; the protection of State structures and special internal and foreign transport; the protection of the assets and companies of Russian citizens and organizations approved by the Government; supporting border troops that are traditionally an integral part of the Russian Intelligence Services; the fight against arms trafficking; the command of all National Guard troops, and finally the protection of men and means of the Guard itself.
The entire internal security will be entrusted to the National Guard and this will obviously relieve the Russian internal and foreign Intelligence Services of a whole range of traditional and routine tasks.
President Putin wants a more geostrategic intelligence, less overburdened with public order tasks, and this is a lesson we should also learn in Italy and in the West.
Some people think President Putin wants to create a "personal army", but the Russian President’s power is pervasive and without any credible internal opposition.
However, in all likelihood, President Putin wants to avoid the coalescing of two dangers he sees looming over the Russian Federation’s near future.
These are imported jihad and the succession of the orange revolutions which, combined with Islamist terrorism, could destabilize Russia permanently, make it vulnerable to financial and strategic manipulation by the West.
President Putin is probably convinced that the United States and some of its allies could make Russia pay a very high price for its ongoing engagement in Syria and the Middle East, which is the real game changer in contemporary geopolitics.
Not to mention the fact that, by opening its Syrian-Mediterranean front, the Russian Federation bypasses the entire military network that NATO and the United States are placing along the Russian Federation’s land borders, from Estonia to Poland and the Czech Republic to Romania.
Certainly, Putin thinks that this could result in a slow and relentless internal destabilization of Russian society. It would also explain the "free hand" given by the Russian leader to the internal Services with the creation of the new Guard. These Services will now find it much easier to take actions to confront external and internal threats to the Russian Federation’s political and economic system.
The designated Head of the new National Guard is General Viktor Zolotov, former Head of the President’s Security Service.
A man certainly trusted by Putin and a great intelligence expert, Zolotov was born in 1964 and is a member of the Russian Security Council, an advisory body to the President, which was reformed in 1996 and meets at least once a month, coordinating Russian Federation security in close cooperation with the Services’ leadership.
In the past Zolotov was St.Petersburg Mayor Anatoly Sobchak’s bodyguard, who protected President’s Putin first steps in the very complex post-Soviet era.
A member of the KGB "active reserve", like Putin, Zolotov was given up for dead several times but, as often happens in the great Russian intelligence game, he is obviously alive and well.
In the 2000 "siloviki war" (the siloviki are the former KGB members), between various groups of agents of the old Services and the inner circle of the already powerful Putin, Zolotov stood with the losers, the men of Viktor Cherkesov against the siloviki Nikolai Patrushev and Igor Sechin.
Zolotov was later "forgiven" by Putin, as the General never made public his position of "liberal siloviki" who supported Dimitri Medvedev as Putin’s successor in 2008.
Later Zolotov commanded the forces of the Ministry for Internal Affairs, now led by General Ragozhin, who has fewer ties with President Putin, while the President of the Judo Federation of St. Petersburg, a longtime friend of President Putin, who is a well-known judoka, has been appointed Head of the Military Police. WHO IS THIS?
Zolotov was also appointed by President Putin who intended to bring peace to the vast community of the siloviki, a highly fragmented group, as early as his return to the Presidency in 2012.
The fight between the former KGB agents was about power, the relationship with the economy and, above all, the struggle for the succession to Vladimir Putin. And this will be the new scenario for which the National Guard seems already prepared, although Vladimir Putin has recently indicated that he is likely to run again in the next presidential election.
This post first appeared on Russia Insider
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