Letter From the Editors
The Kremlin’s pipe(line) dream, aka Nord Stream 2, may be becoming a reality. In May, news came that the Biden administration decided to drop sanctions against Nord Stream AG and its CEO. Then late last week, Biden and German Chancellor Angela Merkel announced a “breakthrough deal” – Nord Stream 2 gets the green light, while Berlin and Washington will try to extend the transit contract between Russia and Ukraine for another 10 years and help Ukraine develop green technologies. Moreover, the pipeline must not be used to put pressure on Ukraine or EU countries; otherwise, the West will enact sanctions against Russia.
But does this agreement really settle the issue of the controversial pipe? Experts immediately pounced on the “coulda, woulda, didn’t” nature of the Biden-Merkel deal. “So, countries A and B are giving guarantees on behalf of country C that it won’t interfere in the affairs of country D? How can this happen without [direct] negotiations with C and D?” wondered expert Mikhail Krutikhin, calling out the “great” deal as wishful thinking. He called Nord Stream 2 “superfluous” and added that the only people who made money on it were the state-affiliated contractors who built it.
According to economist Sergei Guriyev (who fled Russia in 2013), that’s the essence of Putinomics: “State contracts go to the ‘kings of state orders,’ who have been friends with Putin for decades. The state dominates the economy. Russia is a much more corrupt country than those with comparable income levels.” And while the expert agrees with Putin’s claim that the Russian economy emerged from the pandemic stronger than a lot of other, more developed states, he adds that this is due to the fact that instead of shuttering the economy, “the Russian government simply made its peace with the mortality rate.” However, despite the rosy picture painted on state TV, Russians are growing increasingly dissatisfied with the current state of affairs. They are starting to ask: “Why is per capita income in Kazakhstan almost equal to, and sometimes ahead of, per capita income in Russia, when Kazakhstan was 40% poorer than Russia 30 years ago? Why was China a poor country 40 years ago, but salaries in Russia and China are now comparable?”
Of course, the public discontent brewing outside the Kremlin walls is falling on deaf ears, because the regime has been running on autopilot for quite some time, says Tatyana Stanovaya. In fact, Putin no longer concerns himself with the opinions of his puny subjects and feels he can dismiss them out of hand, since his legitimacy now rests entirely on his past achievements. “Caught up in self-worship and messianic ambitions, Putin thinks he is no longer accountable to people – history alone will be his judge,” she writes. And bureaucrats, who now know that they must kowtow to the bosses instead of being accountable to their constituents, follow suit, treating people just as patronizingly. All in all, it is a “system gone blind,” Stanovaya summarizes.
This self-serving glory is perhaps best exemplified by the Main Naval Parade, which took place in St. Petersburg despite public calls to cancel it due to spiking COVID rates in the city. While spectators were banned (at least for part of it), the parade still went ahead. “In all, no less than a quarter of the entire Navy was assembled for the Main Parade,” writes Aleksandr Golts. All this glitz and glamour concealed the fact that the promised upgrades to the Navy are falling short of declared deadlines, and that “the pace of building new ships is such that it only allows for obsolete Soviet-built vessels to be replaced.” For the Kremlin, the naval mirage it has dreamed up is more than enough to make up for such harsh realities. Yet for a growing number of its citizens, writes Stanovaya, Russia seems more like “a runaway train with no pilot at all, traveling at a breakneck speed in an unknown direction.”