Streetwise Professor

June 12, 2009

Russian Bits

Filed under: Commodities,Economics,Financial crisis,Military,Politics,Russia — The Professor @ 11:26 am

A few scattered comments on Russia.

First item: John Wallis spoke at the Manufacturing Markets Workshop this morning, and I had a chance to speak with him a bit after his session.  In his talk he had mentioned the role of innovation in undermining natural states, and sustaining open order ones.  This brought to mind a dilemma that the Russian elite is clearly dealing with.  Medvedev in particular and those associated with him have lamented the rent-based nature of the Russian economy, and have expressed a desire to encourage innovation.  But they want to do it in a way that maintains the natural state.  Rather than encouraging the development of an uncontrolled, open access, Schumpeterian creative destruction technology sector, the Russian elite–even those who recognize that a rentier state is a dead end–want to foster innovation in state firms.  

State firms present less of a challenge to the existing order.  There is no chance of a massively successful entrepreneur upsetting the political equilibrium, creating an alternative center of power.  No high-tech Khodorkovsky, in other words.  

I predict that this system will half succeed.  It will succeed in sharply reducing the risk of the rise of challengers to the existing political order.  It will fail miserably in fostering innovation.  Bureaucratic state firms are death to innovation.   Innovation thrives because the very people that the elite fear–the risk taking, the entrepreneurial, the unconventional–have free rein.  But that can’t be allowed because it threatens the existing order.  Medvedev and others want their cake, and eat it too, but they can’t.  They can’t have a vibrant innovation culture without challenging the political status quo.  As Wallis said in his talk, political dynamism and economic dynamism are highly complementary.  In the end, Russia is likely to choose political stability, which per this argument requires foregoing economic dynamism.  

Second item: Missile defense.  The New York Times has an interesting article on the negative Russia response to a clever US initiative to position some missile defense assets in Russia.  According to the article, the Russian response is a categorical нет as long as there are also missile defense facilities in the Czech Republic and Poland.  Very revealing.  

The article says:

For Russia, any reconfiguration that preserves sites in Poland and the Czech Republic “is just window dressing,” said Dmitri V. Trenin, a political analyst.

“I’m not sure everyone in the U.S. understands how much is at stake as far as the Russians are concerned,” said Mr. Trenin, director of the Carnegie Moscow Center. “The issue for the Russians is, what are the U.S.’s long-term intentions vis-à-vis Russia? And they are looking at missile defense for the answer to that question.”

An unwillingness to scrap the Eastern European facilities would be seen by hawks in Moscow as evidence that “the hidden agenda is to contain and destroy Russia,” he said.

Given the realities of the proposed installation, such attitudes are best explained as paranoid, and immune to reasoned argument and diplomacy.  

Item three:  Russian GDP declined at a 9.8 percent annualized rate in the first quarter:

Russia’s economy contracted the most in 15 years in the first quarter after industrial production plunged and the government’s 3 trillion rubles ($97 billion) in stimulus spending failed to boost companies and banks.

. . . .

The world’s biggest energy supplier is falling into its first recession in a decade after the global slowdown sapped demand for its commodities and companies struggled to find funds. The government’s stimulus package has failed to spur bank lending, even as the central bank cut its main interest rates three times since April.

“Aggressive cuts in official interest rates over the past six months have not fed through to lower borrowing costs,”  Neil Shearing, a London-based analyst at Capital Economics, wrote in a report last week. “A sustained recovery is unlikely much before the second half of next year.”

Manufacturing fell 23.5 percent in the first quarter, compared with a revised 6.6 percent expansion in the same period last year. GDP may slump as much as 8 percent in 2009, Economy Minister  Elvira Nabiullina  said last month, after growth of 5.6 percent in 2008 and 8.1 percent the year before

. . . .

The  deficit, Russia’s first in a decade, may reach 10 percent of GDP this year, according to the Finance Ministry. The Reserve Fund may be exhausted by the end of next year, Finance Minster  Alexei Kudrin  said.

The 10 percent budget deficit projection is 25 percent more than the 8 percent projection that Kudrin had said was the maximum possible allowable.  

Rising oil prices will help the budgetary situation, but not the overall economy:

The recovery in oil prices is unlikely to bolster Russia’s economic performance,  Rory MacFarquhar, a Moscow-based economist at Goldman Sachs Group Inc., said in a report last week.

“We have long argued that oil prices do not have a direct impact on activity, since they are almost entirely taxed away by the state,” he wrote. “In the past, high oil prices were accompanied by strong credit inflows, which do have a stimulative impact. But we do not expect a rebound in credit under current circumstances, given the damage already suffered by both domestic and foreign lenders.”

Goldman predicts a contraction of 7.5 percent in GDP this year, while theInternational Monetary Fund  on June 1 said it expected the economy to shrink 6.5 percent.  Alfa Bank, Russia’s largest privately owned bank, expects the economy to contract 5.7 percent.

That is, the continuing weak worldwide economic situation, with weak investment, weak banks, and weak finance, translates into poor prospects for Russia in 2009 and 2010, higher oil prices or no.  Although some in Russia (particularly in the Putin and Sechin circles) apparently believe that the rebound in oil prices alleviates the need for any structural changes in the economy, this may well be a false hope.  And, as noted in item 1, Russia’s way of groping towards structural change is likely to be unsuccessful in any event.  

This is particularly true in light of:

Item four: Vimplecom and Telenor. Russian bailiffs are edging towards selling off Telenor’s shares in the company pursuant to a Russian kangaroo court verdict in a suit filed by Alfa Group stalking horse Farimex:

Russian bailiffs said they are ready to sell shares in OAO VimpelCom held by Norway’s  Telenor ASA  that were frozen by a court in March.

All documents needed to proceed with the sale of 15.34 million  VimpelCom  shares have been completed and the stock will be offered on the open market “in the near future,” Russia’s Federal Bailiff’s Service said in a  statement  on its Web site today. Bailiffs seized Telenor’s shares in VimpelCom, Russia’s second-largest mobile-phone company, representing a 29.9 percent stake, after the levying of a $1.7 billion fine.

Farimex Products Inc., the Russian owner of a 0.002 percent VimpelCom stake, brought a case against Telenor in Siberia that found the Norwegian company liable for damages for delaying VimpelCom’s expansion in Ukraine, leading to the fine. Telenor says Farimex is a front for billionaire  Mikhail Fridman‘s Alfa Group, which owns 44 percent of VimpelCom. Altimo, Alfa’s telecommunications unit, has denied any link to Farimex.

If Telenor’s shares in VimpelCom are sold, “we are likely to see an escalating political conflict,” said  Konstantin Chernyshev, an analyst at Uralsib Financial Corp. in Moscow. “Telenor is a state-owned company and it’s unlikely it’s going to give up without fighting in the courts.”

As noted above, foreign investment has largely deserted Russia, contributing to its economic implosion (which is stark compared to its supposed BRIC peers).  Things like this are hardly the way to encourage its return, which will make its recovery all the more difficult.  This is also an illustration of the highly personalized nature of justice in Russia, where a favored oligarch gets preferential treatment in the legal system.  

Lastly, just a quick remark on Putin’s performance in monotown Pikalevo:

Mr Putin, who is a master at dispensing ritual humiliation, likened Oleg Deripaska to a cockroach and forced him to accompany him on a tour of Pikalevo, a factory town that has witnessed the most serious social unrest Russia has seen since the start of the global economic crisis.

Last week Pikalevo’s residents vented their anger over job losses and unpaid wages at one of the oligarch’s local factories by blocking a major road and causing a 250-mile traffic jam. The unprecedented protest reportedly worried the Kremlin, which has long been afraid that Russia’s imploding economy could cause serious political unrest.

Anxious to ensure that the Pikalevo problem remained an isolated one, Mr Putin sought to cast himself as the town’s saviour – and Mr Deripaska as its villain.

The prime minister rounded on the hapless tycoon as they toured a cement plant.

“Why has your factory been so neglected?” he demanded, as Mr Deripaska hung his head in apparent shame. “They’ve turned it into a rubbish dump.Why was everyone running around like cockroaches before my arrival? Why was no one capable of taking decisions?”

He then ordered the tycoon to pay all outstanding wages – £830,000 – before the day was out. Mr Deripaska was Russia’s richest man until last year. He has suffered a dramatic reversal of fortune as mounting debt has seen his assets shrink from £17 billion to about £2 billion today.

This is a perfect illustration of the a-institutional, personalized style of the Russian polity.  As Wallis emphasized in his talk, personalization, and the absence of impersonal institutions, are the hallmark of the natural state.  Wallis says that natural states are good things–compared to the alternative of a Hobbesian war of all against all.  And perhaps such a conflict is the only realistic alternative to the existing system; it is quite plausible that an open order with impersonal rules is not a realistic alternative for Russia anytime soon.  But all of these seemingly unrelated items make it very clear that the natural state is deeply embedded in Russia, and that the price to be paid in terms of lack of economic dynamism is likely to be high indeed.


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  1. A lot of interesting points as always, SWP. We missed you while you were away!

    Some thoughts:

    (1) I doubt many schools of management would find the ability to “dispense ritual humilation”
    one to be desired in top level executive. Russians seem to like it, though. Which probably
    expains a lot.

    (2) Russia’s GDP performance is FOUR TIMES worse than that of the U.S. over the same period,
    TWICE as bad as the EU-27. So much for the “safe haven” Putin promised!

    (3) Many analysts are saying that the price of oil is a bubble not supported by real demand. It
    certainly isn’t supported by U.S. demand, which is really the only demand that matters. Putin
    continues to kill the golden goose where the U.S. is concerned. He should be doing all he can to
    revive US demand, instead he does the opposite. That’s a pattern in Russian history.

    (4) There seems to be overwhelming consensus that Russia is looking at a domestic subprime
    crisis on top of the effects of the international crisis it has already experienced.

    Put it all together, it spells D-E-P-R-E-S-S-I-O-N.

    Comment by La Russophobe — June 12, 2009 @ 1:30 pm


    What do you think of Sheila Bair’s actions so far?

    Comment by Surya — June 12, 2009 @ 2:18 pm

  3. 1. Ignores the fact that there was no innovation before the state started moving into hi-tech either, since science and research were on a long process of disintegration after the Soviet collapse.

    2. The cockroach thing is another great example of the Western media misquoting and smearing Putin. What he actually said in fact was “Why were you all scurrying around like cockroaches before I arrived?”

    Comment by Sublime Oblivion — June 12, 2009 @ 2:44 pm

  4. Why am I not even the slightest bit surprised that Sublime Moron thinks it’s just
    fine for the prime minister and former president of a country to refer to human beings
    as “cockroaches”? Naturally, he has no circumspection either regarding the millions that
    Stalin actually did treat like cockroaches, since doing so is just fine with him and
    the KGB scum he worships.

    Even in such brief puddles of vomit, one can clearly see why Russia remains so utterly
    unproductive, so totally impoverished, not among the top 150 nations of the world in
    terms of lifespan. The reason is simple: It has such “friends” as these.

    And let’s see. SWP quoted:

    “Why was everyone running around like cockroaches before my arrival?”

    Sublime Moron retorts:

    “Why were you all scurrying around like cockroaches before I arrived?”

    THAT’S a misquote??? Only if you’ve just downed a whole bottle of vodka like
    Sublime Alcoholic. I actually think the word “scurryying” is far more of a
    “smear” than “running.”

    Ah me. Such is Russia and its funny friends.

    Comment by La Russophobe — June 12, 2009 @ 3:48 pm

  5. @S/O. Re “[i]gnores the fact that there was no innovation before the state started moving into hi-tech either, since science and research were on a long process of disintegration after the Soviet collapse.” Thanks for confirming a point that is a direct implication of my periodic analysis of the Russian economic system. Namely, that the absence of property rights, and a reliable rule of law, and the dominance of a relentlessly short-term orientation attributable to the insecurity of person and property, have led to a strong disincentive to invest in non-resource, non-consumption good projects, and projects with more distant and risky payoffs. (Why invest in something with a large probability of loss but some probability of a huge profit if it is almost certain that such a high profit will be expropriated?) Glad to see that you agree with that the implication of this analysis holds in fact, even if you may disagree with the reasons. But if you disagree with the reasons, what do you propose as an alternative? And, the ultimate point is: innovation: the natural state that is Russia is fatal to innovation.

    @LR. Thanks. Not back yet. Just have a few minutes now and again to dash off a quick post. Wrote “Russian Bits” in Florence under the shadow of the Duomo. Hopefully will be able to beam down a couple times during the next 10 days.

    The ProfessorComment by The Professor — June 13, 2009 @ 2:43 am

  6. Always enjoy your insight into Russia and agreee with your views. It would be interesting to get your take on Russia’s latest announcement that they want to negotiate for WTO entry via a customs bloc of Kazakhstan, Belarus, and Russia. I can’t think of a better example of Russia creating yet another boondoggle for itself. Enjoy your vacation!

    Comment by Howard Roark — June 13, 2009 @ 3:56 am

  7. Howard:

    Thanks and thanks. Just quickly while playing a little hookey from the conference. I think the customs bloc you mention reflects two things. First, a desire to create a simulacrum of the Russian Empire/USSR. Second, a deep reluctance by the elites of each of the countries that you mention, to desire to subject themselves to the rule-based WTO. WTO rules would interfere with the ability of these elites to create and divide rents among them. The elites want a closed system, or to put it differently, to control the amount of openness. WTO would constrain this ability to control. It is another reflection of the retrogression of Russian thinking on economic matters.

    The ProfessorComment by The Professor — June 13, 2009 @ 7:00 am

  8. “But if you disagree with the reasons, what do you propose as an alternative?”

    Rule by Stalinist supercomputer.

    Comment by Sublime Oblivion — June 13, 2009 @ 7:31 am

  9. Ha ha. That’s a proposed solution. I was curious about your view of the reason why, as you acknowledge, there has been “no innovation” in Russia.

    The ProfessorComment by The Professor — June 13, 2009 @ 7:45 am

  10. Howard Roark lives! Cool!

    Comment by La Russophobe — June 13, 2009 @ 8:43 am

  11. Yes, I gave up on architecture and now focus on Russia. 🙂 Thanks SWP. Your explanation makes sense… let me rephrase that, I understand what you say. I thought perhaps I was overlooking something here, but I think I should trust my instincts when it comes to Russia. It’s a terrible shame that Russia always insists on being the square peg in the round hole of life. I don’t know much about China and what makes them different than Russia, but in a naive way, it seems that if they were willing to do it, why isn’t Russia? One of the biggest reasons for China’s interest in joining the WTO was to lower tariff costs for their exports. Makes perfect sense. Guess that can reveal why Russia is not very interested in the WTO, they don’t have much to export and would only lose their creaky industry within days of the WTO doors opening. So, meanwhile, they plod along in an extremely inefficient economy and remain behind a large chunk of the world. And what is humorous (or probably sad) is that the average Russian goes along with this charade.

    Comment by Howard Roark — June 13, 2009 @ 9:03 am

  12. Howard Roark, the Chinese have seeded themselves all over the globe when they find an economic opportunity. They are first class merchants in spite of the decades of Communism. I think that is one of the biggest cultural differences with the risk adverse and isolative Russians. I could be wrong but I predict that in a few generations China will colonize and own large tracts of Russia’s commodity rich Far East. Demographics aren’t in Russia’s favor to stop it.

    I think you are astute in your comments about Russia and the WTO.

    Comment by penny — June 13, 2009 @ 9:54 am

  13. Russia’s three main state-controlled energy firms (Tafneft, Rosneft and Gazprom) have a combined TWENTY ONE BILLION in debt service coming due THIS YEAR ALONE. Yikes!

    The Kremlin faces double-digit economic contraction, unemployment AND inflation, a wicked triple whammy that drives budget revenues to nothing and forces Russia to go hat in hand to Western lenders just to meet current expenses, and now it must cover massive debt across the board. Aluminum workers, faced with unpaid wages, have already rioted in Pikalyovo. Is the Kremlin going to pay their wages, and those in every other industry as well? Hardly.

    Russia is on the cusp of a major meltdown. Again.

    Comment by La Russophobe — June 13, 2009 @ 1:02 pm

  14. Re-no innovation.
    Because the (pro-Western) stooges and traitors who governed Russia in the 1990’s were more interested in plundering it than preserving and building on the Soviet legacy. (Of course there were plenty of economic and institutional (i.e. systemic) constraints to continuing Soviet-era levels of RD&D during the period, but they didn’t even try and showed a callous disregard for it).

    Lol. It’s not for lack of trying Russia can’t get in, but because of politically-founded US opposition. Ukraine cannot be said to be more of a market economy, nor is it more compliant with IP dictates, but it got in since the “right” people were running it.
    Also, the biggest anti-WTO lobby is AFAIK the agricultural sector, which is hardly the most politically connected in Russia.

    Comment by Sublime Oblivion — June 13, 2009 @ 1:33 pm

  15. Stooges happened to be Russian, no? “Preserving and building on the Soviet legacy.” You crack me up, son.

    The ProfessorComment by The Professor — June 13, 2009 @ 1:41 pm

  16. “You crack me up, son.”

    Well, if only “son” was in his teens, but, S.O. is in his 30’s. He’s well past the expiration date for his lame stupid utterances. Hey, after 30 you are a permanent gadfly or sociopath when you make statements as ridiculous as his.

    Comment by penny — June 13, 2009 @ 7:21 pm

  17. The fact that you find an anarchic Russia with zero respect for science or education preferable to a strong, cultured Russia with a firm scientific tradition (albeit true, one geared more towards applied / military R&D rather than “innovation” in the American sense) doesn’t crack me up at all, old dude.

    It’s quite sad really.

    Comment by Sublime Oblivion — June 15, 2009 @ 12:18 am

  18. No surprise that the commenters here (if not the Professor) make excuses for China while condemning Russia, which is far more free religiously and poltically, and root for the Chinese to take over the Russian Far East. Fat chance of that boys and girls, I think Anatoly is right that most Chinese have better things to do than freeze their tookies off north of Khabarovsk, and Russia has many ways to prevent that in any case. But the whole Sorosian/Bzrezinskite attitude that all those nice natural resources would be better off under Chinese management prevails, and nobody calls it what it is — a viciously imperialist mindset. Napoleon had the same idea, he just wasn’t clever enough to rule by proxy.

    Comment by Vic — June 15, 2009 @ 10:27 am

  19. S/O–The discussion was about innovation. You vouched for the Soviet tradition. I mocked that. You, in your sur-response, changed the subject to “scientific tradition”, and effectively admit that Soviet “innovation” in everything but the military sphere was non-existent. The discussion had nothing to do with the scientific tradition. I never gainsaid the Soviet legacy in basic science. And that’s not what Medvedev was talking about either. He–and I–were talking about economic innovation; producing better products, or producing products more efficiently. Don’t weasel. Or, if you were making a different point initially, write more clearly. If you mean to distinguish innovation of the form that Medvedev is trying to spur–the creation of an innovation/knowledge economy–from the Soviet legacy, you need to be quite more discriminating in your choice of words.

    The USSR was technologically backwards in virtually all areas–even in the vaunted heavy industries that Stalin created and you so much admire. The USSR couldn’t produce machine tools or heavy industrial plant that anybody outside the Comecon wanted to buy. And even the Comecon folks didn’t really want to buy it.

    It is sad that Russia has gutted its science. No disagreement here. But a different discussion altogether.

    The ProfessorComment by The Professor — June 15, 2009 @ 4:25 pm

  20. The problem in the USSR was that innovation was too suppressed and the vast majority of technical resources were diverted into the VPK (military-industrial complex). The problem in the 1990’s was that the state stopped subsidizing anything scientific, nor was the government powerful enough to guarantee the rule of law things that are necessary for economic exploitation of any innovation that did happen.

    As for today, most things are going right:
    1) Funding for basic science is being restored, though one of my main complaints about Putin’s rule was that it took so long. Salaries in research institutes are now decent and they have largely stopped hemorrhaging people to the West.
    2) Unlike in Soviet times, the VPK and other government enterprises no longer lock in such a huge fraction of the nation’s technical resources – they now have to compete for that pool on market terms.
    3) There have been increasing, though slow and gradualist, moves to improve small business conditions – though I agree they remain substantially suboptimal.
    4) The final point I’ll make is that some initial government subsidization of hi-tech and protectionism is necessary to get it off the ground and globally competitive. That is certainly happening now in Russia.

    “The USSR was technologically backwards in virtually all areas–even in the vaunted heavy industries that Stalin created and you so much admire.”

    I don’t admire them. Unlike you however I think that is superior to losing all productive capacity under the ravages of neoliberal dogma, which the industrialized nations who preach it don’t even practice themselves.

    Comment by Sublime Oblivion — June 16, 2009 @ 12:54 pm

  21. Sublime Oblivion:

    The “hemorrhaging” has indeed “largely stopped”, but for a different reason than you think. Just like the Jewish emigration, the mass brain drain from Russia ended when there was nothing left to drain. As simple as that.

    As for the rest of your bizarre fantasizing, well… I guess you are either a paid shill, or more likely, a Russian version of a plastic Paddy. You’ve never actually lived in Russia, have you?

    Comment by peter — June 16, 2009 @ 4:30 pm

  22. The simple fact is that there is no innovation in Putin’s Russia just as there was none in the USSR. The fact is that Putin is a proud KGB spy, a relic of the USSR, and therefore the result is absolutely predictable.

    Russia’s level of productivity, much less innovation, is barbarically low. It’s average lifespan is barbarically low, it’s average wage is barbarically low, it is a failed society by an normative standard you care to name, repeating the mistakes of the past and rationlizing them rather than reforming and improving.

    Comment by La Russophobe — June 17, 2009 @ 2:47 am

  23. 1. You have to give evidence that there is “nothing left to drain” instead of argument by truthiness.

    2. To quote myself (since it is a common fanatical-Russophobe “argument”)

    You are under FSB control, tasked with sugarcoating the thugs and kleptocrats who rule Russia to a Western audience. Looks like the Kremlin, having consolidated its control over the Russian media, is now going online. Why should I trust anything you say?

    Obviously, I have no way of refuting this assertion (although I’d sure be glad if you could drop a hint as to where I may collect my paycheck). But that is immaterial. Appeal to motive is a logical fallacy. You can gauge how reliable and trustworthy I am simply by reading my posts, most of whose assertions are meticulously sourced. I wouldn’t recommend you to trust me unconditionally in the same spirit you shouldn’t unconditionally trust anything that anyone says. Everything is relative and subjective. Even mathematical ‘truths’ rely on a set of assumed axioms.

    This is not to say, however, that accusing me of working for the Kremlin is a wise move. It probably isn’t. If your sole basis for slandering me is that you don’t like what I write, then do realize that you undermine your own claim about the Kremlin’s alleged control of the media (presumably, you don’t like what they have to say either).

    Comment by Sublime Oblivion — June 17, 2009 @ 1:55 pm

  24. 1. No, the burden of proof is on you. You claim that the brain drain has stopped thanks to Kremlin’s efforts, I merely offer a more obvious explanation. Occam’s razor, you know.

    2. From your rant, I gather that your answer to the “either” part is no, you don’t get paid for your effort. What about the “or more likely” part? You’ve never really lived in Russia, have you?

    Comment by peter — June 17, 2009 @ 5:18 pm

  25. 1. The fact that there the proportion of the population working in R&D is similar to that in West European countries and the fact its tertiary enrollment rate is at around 70%, similar to the US (according to the statistics that is, not Occam’s Razor).

    2. Quite frankly, not your business. And irrelevant to boot.

    Comment by Sublime Oblivion — June 18, 2009 @ 1:01 pm

  26. 1. The facts you cited can of course be useful in the great debate whether Russia is an almost-developed country or more like a Nigeria with nukes, but you neglected to explain how exactly they are relevant to the present argument.

    2. So it’s a no, you have no first-hand knowledge of life in Russia. Thanks, thought so.

    Comment by peter — June 18, 2009 @ 4:25 pm

  27. 1. They are relevant because your argument implied all or close to all Russian R&D personnel emigrated, which is patently not the case.

    2. Feel free to think that if it makes you feel better about yourself. But unlike you I don’t care to make that such issues into a cornerstone of my arguments.

    Comment by Sublime Oblivion — June 18, 2009 @ 4:41 pm

  28. A lot of places are hurting (especially) during this global meltdown.

    Troubles in Georgia: (WSJ)

    Likewise in Latvia:

    It’s kind of ironic when one participant self-righteously (in manner) speaks out against a particular instance when the word cockroach is used.

    As for the stationing of a missile defense system in Poland and the Czech Republic, the (at least intitially) stated intent is to counter “rogue states,” as in Iran, with Russia not included in that category. Therefore, the official to semi-official advocacy for this plan maintains that Russia should not feel threatened by such a deployment. Russia reasonably offered a joint (Russia and the US) utilizing of such a system in Azerbaijan, which makes more sense. (Russia currently leases land in Azerbaijan, for an existing missile defense system.) The Bush administration reply was to show interest in that Russian proposal, while seeking the Polish and Czech options. The Russian response is that the Azeri option serves as a reasonably complete replacement for the stated intent of having such a system in Poland and the Czech Republic. Russia is being the more unreasonable?

    I’m suddenly reminded of this piece:

    Comment by Cutie Pie — June 18, 2009 @ 10:56 pm

  29. S/O

    Oh I see, your red herrings are relevant to your own straw man. Judging by your mighty logical skills, you must be a humanities undergrad, right?

    Once again, as everybody (who actually was there) knows, the post-Cold War mass brain drain naturally ended when Russia ran out of sufficiently qualified and motivated scientists and programmers. What’s so difficult here?

    Comment by peter — June 19, 2009 @ 2:08 pm

  30. As someone who actually emigrated, I know far from everybody emigrated, including some very competent researchers. Some moved into the commercial sector and some remained in academia. Labeling and dismissing those who for whatever reason preferred to remain in Russia as not “sufficiently qualified and motivated” is nothing more than low-life arrogance and disrespect for alternate viewpoints, something you seem to have in excess. And that’s the end of this conversation with you.

    Comment by Sublime Oblivion — June 19, 2009 @ 5:14 pm

  31. Peter, that’s a very ridiculous claim you’ve made there. First, the majority of Russia’s emigrants in the 90s were people going to Israel and other CIS states, it wasn’t just masses of all the well educated schoalars leaving to the west for better opportunities as the myth goes. And at the same time their net migration was still positive because of all the Ukrainian, Belorussian and other former Soviet citizens coming in, most of whom were no more or less educated than those leaving.

    Now answer me this: if Russia has no sufficiently qualified programmers or scientists, why do they dominate international programming/math contests, beating out schools like Oxford, Stanford, Princeton, U of Tokyo etc..? For example, this year they placed second in the NSA backed coding contest with 10 finalists out of 70 total (US had 2). They won the 2008 ICPC world finals taking 1st and 3rd place, and 6 of the top 12 spots overall. They’ve won that contest almost every year since they started participating, which is nothing to scoff at when you look at the list of participating schools from around the world. And then there’s the International Mathematical Olympiad where they consistently place in the top 3.

    The brains are definitely still there, claiming otherwise is just factually incorrect and suggests that you might be the one lacking a little something up there. What Russia lacks is the motivation and incentive to actually put those brains to good use. They need an economy that isn’t swamped by corruption and that encourages rather than hampers technological innovation.

    Comment by Bob from Canada — June 19, 2009 @ 11:19 pm

  32. With Russia, that last point applies elsewhere as well.

    Comment by Cutie Pie — June 20, 2009 @ 1:39 am

  33. Bob

    I can agree with most of your points, but, apart from a couple words taken out of context, I can’t see quite what they have to do with the specific argument S/O and I were having.

    Comment by peter — June 20, 2009 @ 5:08 pm

  34. What was taken out of context? What you said was quite clear and not really in need of much interpretation. Answer my question: If the brain drain stopped because, as you claim, Russia ran out of sufficiently qualified and motivated scientists and programmers and there’s “nothing left to drain”, then why do they continue to prove themselves as one of the most scientifically proficient countries in the world? Why does such a disproportionate amount of the worlds most skilled and capable programmers/scientists come out of Russian schools and stay there?

    Note: Siding with La Russophobe is never a smart thing to do if your goal is to win an argument through facts and logic. He/she is a troll whose sole intent is to aggravate, provoke and belittle people who don’t agree with his/her extremist and fantasy based ideals.

    Comment by Bob From Canada — June 20, 2009 @ 8:48 pm

  35. The words “sufficiently qualified and motivated” mean nothing out of context, and even in context they are almost tautological. Perhaps I should’ve worded it more delicately or at least added “of active age” — but hey, I’m a former Russian scientist myself, I think I can afford to be a bit blunt when talking about my country and my profession.

    Comment by peter — June 21, 2009 @ 8:02 pm

  36. Bob

    On your last point, note the sources which promote what you refer to.

    Comment by Cutie Pie — June 21, 2009 @ 8:31 pm

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