Interethnic Interaction Dynamics in the Russian Federation

The collapse of the Soviet Union at the beginning of the 1990s also meant the end of the idea of a common soviet identity incarnated in the "soviet man" and the new "historic community of the soviet people". While this idea still lives on in the generations of the 1920s to 1940s, the younger generations tend to prefer identification with family, profession, ethnic group or religion. Ms. Alexakhina set out to investigate different interethnic interaction strategies in the multi-ethnic context of the Russian Federation, with an emphasis on analysing the role of cultural and ethno-demographic characteristics of minority ethnic groups. It aimed to identify those specific patterns of interaction dynamics that have emerged in response to the political and economic transformation at present under way. The basic supposition was that the size and growth of an ethnic population are defined not only by demographic features such as fertility, mortality and net migration, but are also dependent on processes interethnic interaction and ethnic transition. The central hypothesis of the project was that the multi-ethnic and multi-cultural composition of Russia is apparently manifesting itself in the ethnic minority groups in various forms, but particularly in the form of ethnic revival and/or assimilation. The results of these complex phenomena are manifested as changes in ethnic attachments (national re-identification and language behaviour (multi-lingualism, language transition and loss of the mother tongue). The stress of the political and economic crisis has stimulated significant changes in ethnographic, social and cultural characteristics of inter-ethnic dynamics such as the rate of national re-identification, language behaviour, migration activity and the spread of mixed marriages, among both those minorities with a long history of settlement in Russia and those that were annexed during the soviet period. Patterns of language behaviour and the spread of mixed marriages were taken as the main indicators of the directions of interethnic interaction described as assimilation, ethnic revival and cultural pluralism. The first stage of the research involved a statistical analysis of census data from 1959 to 1994 in order to analyse the changing demographic composition of the largest ethnic groups of the Russian Federation. Until 1989 interethnic interaction in soviet society was distinguished by the process of russification but the political and economic transformation has stimulated the process of ethnic revival, leading to an apparent fall in the size of the Russian population due to ethnic re-identification by members of other ethnic groups who had previously identified themselves as Russian. Cross-classification of nationalities by demographic, social and cultural indicators has shown that the most important determinants of the nature of interethnic interaction are cultural factors such as religion and language affiliation. The analysis of the dynamics of language shift through the study of bilingualism and the domains of language usage for different demographic groups revealed a strong correlation between recognition of Russian as a mother tongue among some non-Russian ethnic groups and the declining size of these groups. The main conclusion from this macro-analysis of census data was the hypothesis of the growing importance of social and political factors upon ethnic succession, that ethnic identity is no longer a stable characteristic but has become dynamic in nature. In order to verify this hypothesis Ms. Alexakhina conducted a survey in four regions showing different patterns of interethnic interaction: the Karelian Republic, Buryatiya, the Nenezkii Autonomous Region and Tatarstan. These represented the west, east, north and south of the Russian Federation. Samples for the survey were prepared on the basis of census lists so as to exclude mono-Russian families in favour of mixed and ethnic-minority families. The survey confirmed the significant growth in the importance of ethnic affiliation in the everyday lives of people in the Federation following the de-centralisation of the political and economic spheres. Language was shown to be a key symbol of the consciousness of national distinction, confirmed by the fact that the process of russification has been reversed by the active mastering of the languages of titular nationalities. The results also confirmed that individual ethnic identity has ceased to be a fixed personal characteristic of one's cultural and genetic belonging, and people's social adaptation to the current political, social and economic conditions is also demonstrated in changes in individual ethnic self-identification. In general terms, the dynamic nature of national identity means that ethnic identity is at present acquiring the special features of overall social identity, for which the frequent change of priorities is an inherent feature of a person's life cycle. These are mainly linked with a multi-ethnic environment and high individual social mobility. From her results Ms. Alexakhina concludes that the development of national languages and multi-lingualism, together with the preservation of Russian as a state language, seems to be the most promising path to peaceful coexistence and the development of the national cultures of different ethnic groups within the Russian Federation.

The Ingrian Question as a Historical and Political Phenomenon

The project dealt with the political history of the Finnish-speaking minorities of the Russian northwest, mainly in the 20th century. The first part looks at the development of the national movement of the Ingrian Finns and other related ethnic groups (Izhoras, Votes) from the turn of the century to 1920, when Estonia and Finland signed peace treaties with Soviet Russia and the national rights of the Finnish minority in Russia were to some extent guaranteed. In the second section, on the history of the Ingrians during Soviet and post-Soviet times, areas covered include Ingrian national-cultural autonomy in the 1920s, the activities of Ingrian "ingri" organizations in Finland during the inter-war period, social and national repression and the end of autonomy in the 1930s, the dispersal of the Ingrians during the second world war, their first attempts to return home in the immediate post-war period, trends in the development of the social and cultural life of Ingrians during the last 40 years, and the prospects for their existence as an ethnic unity in the future. The research is based on documentary sources from 15 Russian archives, many of which have not previously been used.

Compensation, Incentives and Risk: Economic Theory and Russian Practise

Mr. Pechersky set out to examine a specific feature of the employer-employee relationship in Russian business organisations. He wanted to study to what extent the so-called "moral hazard" is being solved (if it is being solved at all), whether there is a relationship between pay and performance, and whether there is a correlation between economic theory and Russian reality. Finally, he set out to construct a model of the Russian economy that better reflects the way it actually functions than do certain other well-known models (for example models of incentive compensation, the Shapiro-Stiglitz model etc.). His report was presented to the RSS in the form of a series of manuscripts in English and Russian, and on disc, with many tables and graphs. He begins by pointing out the different examples of randomness that exist in the relationship between employee and employer. Firstly, results are frequently affected by circumstances outside the employee's control that have nothing to do with how intelligently, honestly, and diligently the employee has worked. When rewards are based on results, uncontrollable randomness in the employee's output induces randomness in their incomes. A second source of randomness involves the outside events that are beyond the control of the employee that may affect his or her ability to perform as contracted. A third source of randomness arises when the performance itself (rather than the result) is measured, and the performance evaluation procedures include random or subjective elements. Mr. Pechersky's study shows that in Russia the third source of randomness plays an important role. Moreover, he points out that employer-employee relationships in Russia are sometimes opposite to those in the West. Drawing on game theory, he characterises the Western system as follows. The two players are the principal and the agent, who are usually representative individuals. The principal hires an agent to perform a task, and the agent acquires an information advantage concerning his actions or the outside world at some point in the game, i.e. it is assumed that the employee is better informed. In Russia, on the other hand, incentive contracts are typically negotiated in situations in which the employer has the information advantage concerning outcome. Mr. Pechersky schematises it thus. Compensation (the wage) is W and consists of a base amount, plus a portion that varies with the outcome, x. So W = a + bx, where b is used to measure the intensity of the incentives provided to the employee. This means that one contract will be said to provide stronger incentives than another if it specifies a higher value for b. This is the incentive contract as it operates in the West. The key feature distinguishing the Russian example is that x is observed by the employer but is not observed by the employee. So the employer promises to pay in accordance with an incentive scheme, but since the outcome is not observable by the employee the contract cannot be enforced, and the question arises: is there any incentive for the employer to fulfil his or her promises? Mr. Pechersky considers two simple models of employer-employee relationships displaying the above type of information symmetry. In a static framework the obtained result is somewhat surprising: at the Nash equilibrium the employer pays nothing, even though his objective function contains a quadratic term reflecting negative consequences for the employer if the actual level of compensation deviates from the expectations of the employee. This can lead, for example, to labour turnover, or the expenses resulting from a bad reputation. In a dynamic framework, the conclusion can be formulated as follows: the higher the discount factor, the higher the incentive for the employer to be honest in his/her relationships with the employee. If the discount factor is taken to be a parameter reflecting the degree of (un)certainty (the higher the degree of uncertainty is, the lower is the discount factor), we can conclude that the answer to the formulated question depends on the stability of the political, social and economic situation in a country. Mr. Pechersky believes that the strength of a market system with private property lies not just in its providing the information needed to compute an efficient allocation of resources in an efficient manner. At least equally important is the manner in which it accepts individually self-interested behaviour, but then channels this behaviour in desired directions. People do not have to be cajoled, artificially induced, or forced to do their parts in a well-functioning market system. Instead, they are simply left to pursue their own objectives as they see fit. Under the right circumstances, people are led by Adam Smith's "invisible hand" of impersonal market forces to take the actions needed to achieve an efficient, co-ordinated pattern of choices. The problem is that, as Mr. Pechersky sees it, there is no reason to believe that the circumstances in Russia are right, and the invisible hand is doing its work properly. Political instability, social tension and other circumstances prevent it from doing so. Mr. Pechersky believes that the discount factor plays a crucial role in employer-employee relationships. Such relationships can be considered satisfactory from a normative point of view, only in those cases where the discount factor is sufficiently large. Unfortunately, in modern Russia the evidence points to the typical discount factor being relatively small. This fact can be explained as a manifestation of aversion to risk of economic agents. Mr. Pechersky hopes that when political stabilisation occurs, the discount factors of economic agents will increase, and the agent's behaviour will be explicable in terms of more traditional models.

Changes in the foreign trade structure of the Russian Far East under the process of transition toward a market economy

Under the process of transition toward a market economy, the economic connections of the Russian Far East (RFE) with external regions changed from a division of labor among the regions of the USSR (Russia) to an international division of labor. This happened due to factors including the liberalization of the trade system away from a state monopoly, the presence of rich natural resources and of developed industries related to these resources, the advantage of geographically proximity to Asia-Pacific countries, and the political and economic division of the once unified national economic space during the process of transition. The economic connections of RFE with external economies changed radically under the transition toward the market economy. First, the value of foreign trade increased dramatically and the importance of foreign trade for the RFE economy increased enormously. Second, however, different territories of RFE traveled along different trajectories, due to factors involving their industrial structure and geographical conditions. Third, in recent years connections with China, in the areas of both exports and imports, have grown. Fourth, the share within exports of "fuel, mineral resources and metal" increased radically from the end of the 1990s, and the share of "machine, facilities and transportation means" increased from 2002 year within imports. Under this situation, especially since 2002, there has been a major change in the structure of foreign trade.

Russia's Clandestine War against the United States: The Resurrection of the KGB and Russian Organized Crime Post 9/11

As American leadership has narrowly focused on fighting global terror in Iraq and Afghanistan, the modern version of the KGB, now known as the FSB, has been conducting continuous clandestine warfare operations against the United States. These warfare operations include strategic economic and political partnerships with anti-American entities worldwide and direct embedding of double agents in the US intelligence community. This paper investigates the role of Russia's cultural history leading to the merger of the Russian Federal Security Service (FSB) and Russian Organized Crime (ROC). This paper concludes that the FSB is the most pervasive security threat to the United States and that employing Russian native and heritage speakers of Russian in the US intelligence community compromises US national security.

Russian belligerence and Europe's energy security. EPC Commentary, 19 March 2014

Recent Russian actions have unequivocally underlined that it does not play by the rules. This provides a wake-up call and should alert not only the countries of the former Soviet Union, but the EU as a whole. For the EU, this has one clear implication: it cannot continue to depend on an unreliable energy supplier, which is prone to use energy as a political tool. Luckily for the EU, summer is approaching and Europeans will need less Russian gas for heating. However, potential gas supply disruptions remind Europe of its energy vulnerabilities, and of the 2006 and 2009 winters, when Russia’s decision to stop the flow of gas to Ukraine led to supply crises in a number of EU Member States. As the EU’s heads of states and governments gather in the European Council on 20 and 21 March, the developments in Ukraine and the possible Russian illegal annexation of Crimea will undoubtedly dominate the discussions. Securing energy supply will figure on the agenda, but energy should also be seen as a means to pressure Russia. It is important that the Member States use the occasion to commit to working together on energy security. If this is addressed in a holistic way, it can also support European industry and climate policy – the other issues on the Council agenda that run the risk of being forgotten.

The German reaction to the Russian-Ukrainian conflict- shock and disbelief. OSW Commentary No. 132, 03.04.2014

The crisis in Ukraine and the Russian intervention have brought about a situation in which it is necessary for Germany to make decisions and take action. No one in Berlin was prepared for this nor did anyone want this to occur. The effect of this is that the government has adopted a clearly critical stance on Russia, albeit in tandem with cautious diplomatic moves; it has given its consent to limited sanctions on representatives of the Russian elite, and has disapproved of economic sanctions. On the other hand, voices have been heard in the political debate in Germany not only warning of the catastrophic consequences of a deterioration in German-Russian relations but also those in fact expressing understanding for the Russian reaction. Although it is typical above all of the business circles engaged in Russia and the authors of Germany’s Ostpolitik to downplay the Kremlin’s moves, political parties and the German public are divided over how Germany should respond to Moscow’s policy, and this dispute will worsen. Berlin will take a whole array of actions to de-escalate the conflict, since the imposition of radical political and economic sanctions on Russia would also have a strong adverse effect on Germany. As regards sanctions, Germany would not only sustain economic losses, but they would also undermine the ideological foundations for the still popular vision for Germany’s strategy towards Russia in which great emphasis is laid on a strong “respect for the EU’s most important neighbour and its interests”.

The bear watches the dragon. The Russian debate on China. OSW Point of View Number 31, February 2013

Most participants in the Russian public debate seem to agree in their evaluation of the present condition of Russian-Chinese relations. There is awareness of increasing inequality between these two powers and Russia’s weakening position as compared to China.Those who share the optimistic view see co-operation with China as an opportunity for the Russian economy and a key element of Russia’s multi-directional foreign policy, an opportunity for Russia to avoid unilateral dependence on the West. The pessimists view the deepening co-operation with China through the prism of threats resulting from the increasing imbalance in bilateral relations. The greatest source of concern is the model of economic relations, which is often referred to as neo-colonial, where Russia’s role is reduced to that of a supplier of raw materials to China. The possible consequences are evaluated in different ways, ranging from the political subordination of Russian interests the Chinese ones to real loss of control over the Russian Far East. Those who share such views believe that Moscow should slow down its rapprochement with China and search for other partners in Eastern Asia, relations with whom could counterbalance the Chinese influence.

'The power gained, we will never surrender': Russian ruling elite versus the succession and economic crisis. OSW Point of View (Policy Brief), October 2009

Even though the economic crisis proved harmful to the Russian economy and people's living standards, it has nonetheless failed to make the elite revise its policy. Despite some problems, the government has managed to sustain economic and political stability, thanks to the reserves it amassed in the times of prosperity, and to the propaganda campaign that protected it, above all Vladimir Putin. The crisis failed to force the elite to implement deeper structural and political reforms. Moreover, it has actually reinforced existing tendencies, such as state control over the economy and its oil-oriented character, the elite's economic expansion at the expense of private businesses, and the preservation of political power. Thus, the crisis has so far failed to dismantle Putinism, indeed quite the reverse - it has in fact contributed to its becoming 'set in stone'.

Russian gas industry - current condition and prospects; New regional 'in-security' system in Central Asia; Caspian oil and gas: the facts at the end of the year 2000. OSW Study 1/2001

Russian gas industry: The current condition of the gas industry is one of the most crucial factors influencing the Russian state·s functioning, internal situation and international position. Not only is gas the principal energy resource in Russia, it also subsidises other sectors of the economy. Status of the main European gas exporter strengthens also Russia's importance in the international arena. New regional in-security: Ten years have passed since the Central Asian states declared their independence, but their relationship with Russia still remains close, and the latter treats them as its exclusive zone of influence. A crucial reason for keeping Central Asia within the orbit of Moscow·s influence is the fact that Russia exercises control over the most important transport routes out of the region of raw materials for the power industry, on which the economic development of Asia depends on. But this is the only manifestation of Central Asia·s economic dependence on Russia. Moscow lacks solid economic instruments (i.e. investment input or power industry dependence) to shape the situation in the region. Caspian oil and gas: Caspian stocks of energy resources are not, and most probably will not be, of any great significance on the world scale. Nevertheless it is the Caspian region which will have the opportunity to become an oil exporter which will reduce the dependence of the European countries on Arabian oil, and which will guarantee Russia the quantities of gas which are indispensable both for meeting its internal demands and for maintaining its current level of export. For Azerbaijan, Kazakhstan and Turkmenistan, the confirmation of the existence of successive oil strata is not only an opportunity to increase income, but also an additional bargaining chip in the game for the future of the whole region. The stake in this game is the opportunity to limit the economic, and by extension the political influences of Russia in the region.

Big business in the Russian economy and politics under Putin's rule; The Russian power industry shortly before reforms; Ukrainian metallurgy: the economic link in the oligarchical system. OSW Study 5/2002

Big business in Russia: The pace of ownership transfer in the Russian economy has speeded up considerably over the last year. There has been a significant rise in the number of acquisitions of whole enterprises, and large blocks of shares in individual firms and plants. Similarly the number of mergers, bankruptcies and take-overs of failing firms by their strongest competitors has grown. The Russian power industry: This study is an overview of the current condition and principles on which the Russian power sector has been functioning so far. This analysis has been carried out against the background of the changes that have been taking place in the sector since the beginning of the 1990s. This text also contains a description of guidelines and progress made so far in implementing the reform of the Russian power industry, the draft of which was adopted by the government of the Russian Federation in summer 2001. However, the purpose of this study is not an economic analysis of the draft, but an attempt to present the political conditions and possible consequences of the transformations carried out in the Russian power sector. The final part attempts to evaluate the possibilities and threats related to the implementation of the reform in its present shape. Ukrainian metallurgy: The metallurgic sector, like the east-west transit of energy raw materials, is a strategic source of revenue for Ukraine. Over the last ten years, this sector has become Kiev's most important source of foreign currency inflows, accounting for over 40 per cent of its total export revenues. The growth of metallurgic production, which has continued almost without interruption since the mid-1990s, has contributed considerably to the increase in GDP which Ukraine showed in 2000, for the first time in its independent history.

North Caucasus: the Russian Gordian knot. The key problems and conflicts in the region and the effect thereof on the future of Russia; Putin after re-election: The Kremlin's policy in Vladimir Putin's second term. OSW Study 16/2004

North Caucasus: North Caucasus is the most instable part of the Russian Federation: since the early 90's, there has been going on the military conflict in Chechnya, which is gradually spilling over into the other republics of the region, terrorism seems to have occupied its regular position in the political life of Caucasus, organized crime is flourishing, the tension persists there and military incidents and attacks are breaking out every now and again. During the recent year, the destabilization of the region, which affects many fields of Russian political and social life, has grown to an alarming size. Putin after re-election: Vladimir Putin's first term as President was a period of submitting political, regional and economic lobbies to the Kremlin. The actions Putin has taken since being re-elected are aimed at consolidating the Kremlin's control over the political, economic and social spheres. Further liquidation of political and informational pluralism, an increase of the ruling group's control over state and private property, and an intensification of state propaganda aimed at generating social support for the Kremlin's initiatives have all proceeded apace. These processes reinforce authoritarian tendencies and strengthen the emerging monocentric political system, with the President's strong domination over political, economic and social life.

Gazprom's position on the Russian gas market weakening. OSW Commentary No. 70, 2012-02-23

As the difficulties Gazprom has faced in recent years on the European market have multiplied1, so more and more symptoms have appeared which may suggest that the company’s dominant position is deteriorating. The decision made by the Russian government in June 2011 to double the tax Gazprom has to pay on the extraction of gas, which was later approved by parliament, was the first time in many years when the company’s fiscal privileges were withdrawn. The process of Gazprom’s assets being taken over by private companies and business partners from within Vladimir Putin’s closest circle is underway. More and more frequently attempts are being made to challenge the company’s monopoly in areas of key importance for the functioning of the entire gas sector, such as Gazprom’s exclusive right to dispose of the Russian gas transportation system and its exports monopoly. Competition from independent gas producers on the domestic market is growing, and Gazprom is gradually being pushed out of some of that market’s most profitable segments (industrial clients). The emerging tendencies in the Russian gas sector derive from a number of factors – from the situation on the European gas market, through difficulties hampering the development of the sector in Russia itself, to the private interests of the current ruling class and its business partners. The plans for a structural reform of the monopoly (including isolating gas transportation system from Gazprom), presented since 2000 by the Ministry for Economic Development and since 2003 by the Russian Association of Industrialists and Entrepreneurs (RSPP), suggest a direction for the changes necessary to stimulate the sector’s development and improve the efficiency of Gazprom itself. However, the monopolist’s current business model gives the government full control over this strategic enterprise, which is a core of Putin’s concept for developing Russia as a global energy power. Despite Putin’s recent statement that he “does not rule out privatising Gazprom in the future” (made at a meeting with political scientists in Moscow on 6 February this year), any structural reform of Gazprom (and consequently, a weakening of the state’s control over it) seems unlikely in the foreseeable future. Still, the developments on the domestic market – growing pressure from other gas companies (oil corporations and independent producers) and changes on the European market2 – may result in the weakening of Gazprom’s monopoly privileges and a gradual deterioration of its special status within Russia.

Turbulence ahead: disputes within the Russian ruling elite are gathering force. OSW Commentary No. 91, 2012-09-27

The last month has seen a public confrontation between Igor Sechin, the president of Rosneft, and Arkady Dvorkovich, the deputy prime minister, concerning the consolidation of the energy sector. This is the latest in a series of disputes between the Kremlin & businessmen from Putin’s inner circle on one side, and the government & Prime Minister Medvedev on the other. These disputes have been wide-ranging in nature, concerning economic policy, the scope of competency of individual members of the elite, but also the ‘tough line’ adopted by the Kremlin since Vladimir Putin’s return to the presidency. The Kremlin, which is still the main decision-making centre in Russia, has been effectively forcing its opinions through in its short-term disputes with the government. However, a new element in the ongoing conflicts, which is unfavourable to President Putin, is their exceptional strength, their much more public nature, and their wide range (which has included criticism of the president himself) and ever-changing context, especially the worsening socio-economic situation. These conflicts have been overlapping with signs of dissent among Putin’s business supporters, and their declining political willingness to support the leader unconditionally. The Kremlin’s response to the unrest consists of intensifying efforts to discipline the elite and weakening those groups in which Vladimir Putin has limited confidence. The elite’s support is crucial to the stability of his government; to maintain this support, the Kremlin is ready to introduce restrictive and repressive actions against both parliamentarians and government officials. In the short term, such a policy will force the Kremlin’s supporters back into obedience, but fears of a further increase in repression are also starting to be expressed on the sidelines.

The 'tribal areas' of the Caucasus: The North Caucasus - an enclave of 'alien civilisation' within the Russian Federation. OSW Study 34/2010

Militant Islam is currently the greatest threat to security and stability in the Russian part of the Caucasus. However, even though the armed Islamic underground is capable of organising terrorist attacks and carrying out actions of sabotage, it seems too weak to bring about any change in the Caucasus’s political status quo. Besides, militant Islam is merely a symptom (albeit the most radical and spectacular) of a much wider process, namely the widening civilisational gap between Russia and the North Caucasus, initiated by the collapse of the Soviet Union. The key elements of this process are as follows: the spontaneous re-Islamisation of social life and the dynamic growth of Islam's political influence; the de-Russification of the region; and the ongoing marginalisation of secular intellectuals. As a result, the North Caucasus, and principally Chechnya, Ingushetia and Dagestan, are turning into an enclave separated from the rest of the Russian Federation by a growing civilisational gap, and becoming increasingly different from the rest of Russia. This situation may recall the tribal areas of Pakistan inhabited by Pashtuns (FATA) along the Afghan border.