2016-11-16 By Richard Weitz

Although the Valdai Conference’s major panels focused on globalization and its discontents, in the closed sessions the Russian officials mainly addressed Russia’s political and economic situation.

They were generally optimistic about the country’s political stability, but were divided over its whether Russia could overcome its major domestic and foreign economic challenges.

According to the official line, under President Vladimir Putin’s guidance, the Russian political system has become more competitive, representative, transparent, fair, and effective. In contrast, critics described the recent parliamentary elections as flawed as previous ballots and attributed the lack of popular protests to political apathy rather than mass approval.

Although one legislative leader said that the Russian Duma has become more important, he reaffirmed the slogan, “No Putin, no Russia,” stressing that Russia has a presidential system with an indispensable political leader who has successful surmounted past economic and political challenges and was expected to do likewise in the future.

At Valdai, Putin turned aside the opportunity to discuss his future plans at the final public session, declining to comment on his retirement plans or his place in Russian history. Most experts at the conference expected him to run for reelection in March 2018.

Russian officials who spoke in the closed sessions believed the Russian economy could thrive without the political system’s transformation, citing the examples of Singapore and China.

A former Russian official, however, argued that the Russian government’s constraints on civil society were seriously constraining the country’s economic and political development.

In response to a question from the audience, a current Russian political leader denied that Russia now had a “Kamikaze Duma”—one that would have to take unpopular steps like pension reform, increasing the retirement age, cutting education and health, increasing taxes, and redistributing money from the regions in order to maintain the president’s popularity when he runs for reelection in 2018.

Russian officials insisted that even potentially controversial decisions, such as the planned rise in the age eligibility of pensions, would not have any negative social consequences—an implicit reference to mass public protests in 2011 and 2012.

In another session, Russian speakers spoke optimistically of the Skolkovo Innovation Center; a $3-billion science and technology entrepreneurial center near Moscow.

The government’s aim has been to use administrative and regulatory reforms as well as targeted financial assistance to promote high-tech startups. The projects would then ideally commercialize Russian applied technological and scientific achievements in the information, energy, nuclear, biotechnology, and outer space sectors.

The Massachusetts Institute of Technology has been helping develop research, education, and entrepreneurship programs at the Center’s new graduate training organization, the Skolkovo Institute of Science and Technology (“Skoltech”).

Yet, various impediments have kept Russia from emulating California’s “Silicon Valley,” despite the earnest engagement of Russian and foreign scientists.

These have included reduced government funding, the annulment of some regulatory waivers, the failure to enact the base law on technological parks for existing universities, the departure of some startups from Russia, and anti-corruption concerns that have disrupted various initiatives.

Skoltech has become operational but still lacks a university campus at the site, whose opening is now scheduled for September 2017.

Russian officials disputed contentions that insufficient government support had limited the planned growth of the small and medium-sized businesses in the economy.

However, they confirmed that some small businesses believe they have to partner with larger state-owned corporations to access certain government resources.

As one observed, “businesses feel like they should depend on the administrative connections rather than the quality of the products.”

However, one Russian speaker recognized that for innovation to prosper, his country needed a stronger private sector and more opportunities for the “creative sector.” He calculated that the Russian state was investing more in its technological development than many foreign governments, including Japan and Canada, but that these countries private sectors generated many more technological advances than Russia.

The senior Russian officials who spoke at Valdai downplayed Russian corruption concerns, arguing that government policies had reduced corruption over time.

They claimed that, “Our anti-corruption legislature and practices are far more advanced” than before and in other former Soviet republics like Ukraine. For example, they stated that new regulations and legislation made it easier to start a business without having to pay bribes to government officials and provides better safeguards against conflicts of interests.

The officials said no government plans exist to make major changes in the Russian tax system before 2018, except for some possible increases in excise taxes on tobacco and alcohol (partly for health reasons) as well as additional taxes on the oil and gas sector. They are currently debating whether to adopt a more progressive tax system in the future.

They said they wanted to avoid making major cuts in government spending and hoped that the privatization of state corporations such as Rosneft, anti-monopoly legislation, and further deregulation of private industry would generate enough economic resources to sustain high employment, restore national economic growth, and avoid depleting the government’s major reserve funds.

In practice, the privatization process has proven controversial. Some observers question its wisdom or, conversely, claim that large corporations will still be subjected to substantial indirect Russian state control. Even if successful, this privatization would lead to only short-term debt relief as the state assets are sold off; the country needs long-term growth to boost public revenue and private income.

A return to high oil prices would also solve this problem, but most Russian officials cautioned against relying on being too optimistic, saying it was prudent to plan on low oil and gas prices for the indefinite future.

As for the international economy, the Russian officials said that they were being proactive in seeking foreign markets and remained open to participation in principle in regional trade agreements. They also planned to continue allowing the ruble to float freely on international exchange markets, with the Central Bank prepared to intervene in an emergency if required.

Some Russians implied that the government hoped that its deeper integration into Eurasia and East Asia would compensate for Moscow’s constrained economic ties with the West.

Still, they insisted that Russia wanted “to reach a balance” and saw “no real obstacles to our collaboration apart from current sanctions.” Although the sanctions “violated…cooperation and mutual understanding,” Russians remain open to future economic collaboration with the West based on mutual interest and reciprocity.

One Russian speaker correctly observed that continued progress in diversifying Russian exports beyond energy commodities would help reduce the ruble’s volatility.

He also cautioned that Russia’s demographic challenges could become more serious in some areas due to the incoming migration of Russians from other countries that had helped compensate for the declining number of working age people in Russia.

Editor’s Note: About the Valdai Conference

The Valdai Discussion Club was established in 2004. It is named after Lake Valdai, which is located close to Veliky Novgorod, where the Club’s first meeting took place.

The Club aims to promote dialogue of Russian and international intellectual elites and to deliver independent objective scholarly analysis of political, economic, and social developments in Russia and the world.

The intellectual potential of the Valdai Discussion Club is highly regarded both in Russia and abroad. More than 1,000 representatives of the international scholarly community from 63 countries have taken part in the Club’s work. They include professors from major world universities and think tanks, including Harvard, Columbia, Georgetown, Stanford, Carleton Universities, the University of London, Cairo University, the University of Tehran, East China University, the University of Tokyo, Tel Aviv University, the University of Messina, Johns Hopkins University, the London School of Economics, King’s College London, Sciences Po and the Sorbonne.

The Valdai Club’s regional programmes, the Asian, Mid-Eastern and Euro-Atlantic Dialogues, have drawn considerable attention from the international expert community. The Club holds a special session at the St. Petersburg International Economic Forum.

The Club’s meetings have been attended by many leading politicians, experts, public figures and cultural figures from Russia and other countries. Russian participants have included Sergei Ivanov, Chief of Staff of the Presidential Executive Office (2011-2016); Vyacheslav Volodin, First Deputy Chief of Staff of the Presidential Executive Office; Dmitry Medvedev, Prime Minister (attended as President of Russia in 2008–2012); Igor Shuvalov, First Deputy Prime Minister; Sergei Lavrov, Minister of Foreign Affairs; Sergei Shoigu, Defence Minister; Sergei Sobyanin, Mayor of Moscow, and others. Foreign guests have included Wolfgang Schьssel, Chancellor of Austria (2000–2007); Romano Prodi, Prime Minister of Italy (1996–1998, 2006–2008); Dominique de Villepin, Prime Minister of France (2005–2007); Mustafa Barghouti, General Secretary of the Palestine National Initiative; Volker Rьhe, German Defence Minister (1992–1998); Franзois Fillon, Prime Minister of France (2007–2012); Krzysztof Zanussi, Polish film and theatre director and producer; Shlomo Ben Ami, Israeli Foreign Minister (2000–2001) and Security Minister (1999–2001); Franco Frattini, Italian Foreign Minister (2008–2011); Robert Skidelsky, Member of the British House of Lords; Jбn Čarnogurskэ, Prime Minister of Slovakia (1991–1992); Vбclav Klaus, President of the Czech Republic (2003–2013) and many others.

Russian President Vladimir Putin has met with the participants of the Valdai Club’s annual meetings every year since its founding.

In 2014 the Club moved away from the format of “telling the world about Russia” to practical work aimed at forming the global agenda and delivering a qualified and objective assessment of global political and economic issues. One of its main objectives is to promote dialogue within the global intellectual elite in order to find solutions to overcome the current global crisis.

The Club actively collaborates with opinion makers across various fields, including international relations, global politics, economics, security, energy, sociology, communications, and so on.

The non-profit Foundation for Development and Support of the Valdai Discussion Club was established in 2011 with a view to expanding its activities to new areas, including research and outreach work, regional and thematic programmes. In 2014 the Foundation assumed all responsibility for management of the Club’s projects. 

The Foundation’s founders are the Council on Foreign and Defence Policy (CFDP), non-profit partnership Russian International Affairs Council, the Moscow State Institute of International Relations (University) of the Russian Ministry of Foreign Affairs (MGIMO), and the National Research University Higher School of Economics (HSE).

The Board of the Foundation is responsible for the Foundation’s affairs. The Board is chaired by Andrey Bystritskiy, renowned Russian media manager, author of articles and publications, and media and communications researcher. Fyodor Lukyanov, well-known Russian international relations and foreign affairs expert and editor-in-chief of the “Russia in Global Affairs” journal, is the Academic Director of the Foundation. The Foundation’s day-to-day operations are managed by Executive Director Nadezhda Lavrentieva, Honoured Economist of the Russian Federation, and former top manager at major Russian media outlets.

http://valdaiclub.com/about/valdai/

2016-11-16 According to a story on the UK Ministry of Defence website, the UK and Norway have agreed on new cooperation on Maritime Patrol Aircraft.

With the coming of the P-8 to the RAF, the UK MoD is looking to ways to enhance its impact on defense in the North Sea and beyond.

Sir Michael, who visited Norway’s top military headquarters, close to the Arctic Circle on Thursday, announced that the UK and Norway would work closer on Maritime Patrol Aircraft cooperation, including in reducing costs and increasing operational effectiveness.

The UK announced that it would procure nine Boeing P8 MPA in last year’s Strategic Defence and Security Review.

The new capability, which will be based in Scotland, will allow for enhanced situational awareness in key areas such as the North Atlantic, and will also further increase the protection of the UK’s nuclear deterrent and our two new aircraft carriers.

Sir Michael also visited Norway’s Bodø Main Air Station, home of two F-16 squadrons and a squadron of Search and Rescue Sea King helicopters, where he signed a new agreement on host nation support for UK exercises in the country, further increasing the UK and Norway’s ability to exercise, train and operate together.

Mr Fallon welcomed the fact that British armed forces undertake yearly winter training in Norway, particularly 3 Commando Brigade in Harstad and Evenes and elements of Joint Helicopter Command at Bardufoss.

Defence Secretary Sir Michael Fallon said:

Britain needs Maritime Patrol Aircraft to keep watch over the seas.

As part of our £178 billion defence equipment programme, we’ve committed to new maritime patrol aircraft that are able to monitor threats to Britain and our armed forces.

By stepping up cooperation with Norway on maritime patrol, we will help keep Britain safer and more secure.

The Defence Secretary arrived in Norway following meetings with the Northern Group countries on Wednesday in Copenhagen, where he reaffirmed the UK’s commitment to European defence.

As part of this, the Defence Secretary announced that 5 Battalion The Rifles would lead the UK’s battalion in Estonia next year, part of NATO’s Enhanced Forward Presence in the East.

Work on the UK’s MPA programme is progressing well, including the investment on infrastructure in Lossiemouth in Scotland, where the planes will be based.

Former armed forces personnel who previously served on UK Nimrod are also re-joining the RAF to help operate the future P-8s.

12 have recently re-joined and more will re-join in the future

 https://www.gov.uk/government/news/uk-and-norway-agree-new-cooperation-on-maritime-patrol-aircraft

And the Norwegian Ministry of Defence website added this with a November 10, 2016 article with regard to the Northern Headquarters’ Conference conducted at the 8-9 November meetings at the Norwegian Joint Headquarters in Bodø, Norway:

As a security forum for operational-level headquarters within the Joint Force Command Brunssum (JFCBS) Area of Responsibility (AOR) in the north-eastern part of the Alliance, the forum enables Commanders from NATO and partner nations to discuss areas of common regional interest, and to raise NATO’s profile within, and on the periphery, of Alliance territories.

In his opening remarks, General Salvatore Farina, Commander JFC Brunssum, emphasized the opportunity to discuss operational challenges, and to find practical solutions focusing on our area of responsibility “where we are working closely together”.  

He thanked Lieutenant General Rune Jakobsen, Commander of the Norwegian Joint Headquarters, for his hospitality, and expressed his appreciation for the close links to NATO’s partners from Finland and Sweden – “who have a significant contribution to make to security in the strategically important northern region”, Farina added.

With the outcomes of the Warsaw Summit fresh in everyone’s minds, this year’s event was an ideal platform to discuss selected outcomes affecting the AOR, to focus on NATO’s High North and parts of the long term Adaptation Measures of the Readiness Action Plan, including the Very High Readiness Joint Task Force (VJTF), NATO Force Integration Units (NFIU) and the establishment of an enhanced forward presence in Estonia, Latvia, Lithuania and Poland in early 2017.  

General Farina underlined the important role of the Multi National Corps North-East, Stettin, Poland, in implementing and conducting the enhanced forward presence drawing upon its expertise in land operations.

 https://forsvaret.no/en/newsroom/news-stories/third-northern-headquarters-conference-takes-place-in-norway

About Europe’s Northern Group:

By Elisabeth Braw, June 11, 2015

Under ordinary circumstances, the Northern Group would hardly be headline news. The association of northern European countries holds regular ministerial meetings, strategic meetings, and expert-level meetings, but so do many other intergovernmental outfits. Lately, though, Russian analysts have been watching this very vanilla-sounding Nordic association carefully.

That’s because while its member states may consider themselves very peaceful indeed, the five-year-old Northern Group is a military alliance. Take a look at the group’s members: Britain, Poland, Germany, the Netherlands, the Nordic states, the Baltic states. Only two countries in this 11-strong congregation are not NATO members: Sweden and Finland. And there they are, collaborating with their northern neighbors on defense issues and participating in talks held by the Northern Group’s NATO members.

87652 random 1.0 5.0

“The Northern Group provides a key platform to help shape and deliver Europe’s and NATO’s response to the security implications of Russia’s indefensible actions in Ukraine and whose incursions of European air and sea space have increased,” Britain’s defense secretary, Michael Fallon, said ahead of the group’s meeting in November last year, at which point annual air incursions into the members’ territory had reached 100—three times as many as during all of 2013. Not bad for an alliance conceived by then Defense Secretary Liam Fox essentially to keep Britain engaged with its NATO allies.

Sure, the Northern Group is hardly essential to its members who also belong to NATO. It’s a complement, not an alternative, said Norwegian State Secretary Roger Ingebrigtsen at an earlier meeting. But for Sweden and Finland, who are still vacillating about NATO membership, it provides a convenient partial solution that, handily enough, doesn’t require a major political debate.

Though Finland’s new government has said that it will conduct a study on NATO membership, the step in no way indicates that Finland will eventually apply to become a member.

Besides, it would have to join with Sweden, whose government has not embarked on a similar fact-finding mission, though in April it announced that it wants to strengthen cooperation with NATO. Even if the pair would apply for NATO membership, it would be a long process before they formally joined.

By contrast, Sweden and Finland are already full members of the Northern Group.

That’s good news as far as their defense capabilities are concerned, one might argue. But it’s no surprise that Russian officials suspect the group of really being a mini-NATO. And the Russian military correctly judges that in a crisis situation, NATO would come to Sweden and Finland’s aid.

http://www.worldaffairsjournal.org/blog/elisabeth-braw/europe%E2%80%99s-northern-group

The slideshow shows the Minister of Defence visiting Jax Navy last year and the photos are credited to the US Navy. 

2016-11-12 By Kenneth Maxwell

One thing is certain: none of the pundits predicted the victory of Donald Trump.

As one stunned commentator said when Trump passed the 270 barrier of electoral college votes, guaranteeing his victory during the early morning of November 9th:

They were all “spectacularly wrong.”

So was Hilary Clinton and her supporters. They thought, even as the results were beginning to be tabulated, that they would win.

But this was a repeat performance.

The same “experts” had also got the result of the UK referendum on membership of the EU wrong earlier in the year. Donald Trump had already said on the campaign trail that the US presidential election was “Brexit, plus, plus, plus.”

It was.

And the result has produced the biggest political upset in recent U.S. history.

Trump has never held any public office.  He has not been elected anywhere. He has no government experience at all.

He will assume the presidency without any political obligations to anyone or to any special interests. This terrifies the political and economic establishment that he so effectively railed against during a very ugly and divisive presidential campaign where he consistently called Clinton “Crooked Hillary” and his supporters chanted “lock her up.”

But a politically unencumbered Donald Trump also has the opportunities to make history.

Will he?

It is much to easy to dismiss Trump’s supporters, as Hillary Clinton did, as being “deplorables” as she called Trump’s noisy and boisterous crowds, in one of her less felicitous observations.

And especially to dismiss those who turned out in absolutely record numbers to support him on Election Day as all being older white men, all of them backwoods racially and ethnically prejudiced neo-nationalist extremists.

They were not.

In fact, even 30% of Latinos, seen by the pundits as being overwhelmingly for Hillary Clinton, voted for Donald Trump. And although Clinton won in 31 of 35 cities, Trump won statewide in Florida, Ohio, North Carolina, Pennsylvania, and in Wisconsin.

He even won in Utah where the pundits had predicted that the large Mormon population would reject him.

It is true that his supporters included a wide range of people dissatisfied and angry with the metropolitan and globalized elites which have dominated both political parties. 

Hillary Clinton was seen as representing the political status quo. As indeed she did.

And the wiki leaks revelations of the apparently shady dealings of the Clinton foundation, where Bill (And Hillary) had gained mighty fees for speeches (including from the Brazilian banco Itaú)  which had more to do with gaining influence, than for the content of the Clintons discourse, as well as the saga of the congressional and FBI on-and-off investigation of her use of a private email server while she served as President Obama’s Secretary of State, did not help.

But above all she missed the growing consternation and alienation of the majority of citizens.

This included many disenfranchised white former unionized working class men, displaced by the loss of formerly well paying manufacturing jobs throughout the upper mid-western states, who have seen, over the past two decades, their factories closed, and their jobs lost to Mexico and China.

And this sullen anger was powerfully reflected by Trump’s anti-free-trade rhetoric, and his constant attack on NAFTA, which had been one of president Bill Clinton’s principal, and much touted trade deals, and which many who live in the so-called “rust-belt” communities, blame for the demise of their livelihoods.

In the distant past in Europe what happens this week in the United States would have been called a “peasants revolt”.

Today it is a revolt at the ballot box.  

But no-one should underestimate what has just happened.

Both in the UK over Brexit, and now in the USA, President-elect Donald Trump has, in his own inducible and often tough style, taken advantage of a wave of neo-populist revulsion with the political and economic establishment, especially that located in cosmopolitan New York City and Washington DC.

This allowed him to gain an overwhelming electoral victory, which will without question, not only transform American politics for decades to come, but which will also potentially bring about profound changes in US relations with the rest of the world.

Trump’s victory also saw the Republican Party retain control of the US House of Representatives and the US senate. And they did so very much as a result of Trump’s electoral coattails.

This will mean what speaker Paul Ryan calls a “republican” government, where the two houses of congress and the presidency are all held by the same political party.

This will have enormously important implications for future legislation, and above all for the future composition of the Supreme Court, where the appointment of a new justice is pending to fill the vacancy left by the death of justice Antonin Scalia, and where more vacancies are likely to be occur over the next few years.

So that the other major branch of the US government structure, the Supreme Court, is also impacted by Trump’s victory.

What else will Trump do?

On the domestic front, Trump has promised to do away with “Obamacare” which was President Obama’s singular legislative achievement, but which is deeply unpopular among voters, and which faces major rises in the cost of premiums next year.

He has said he will reverse all of Obama’s executive orders which is within his presidential power to do.

On the foreign policy front, he will, he said during the presidential campaign, undo the nuclear deal with Iran. He will deport, he says, all undocumented aliens held in US jails on criminal charges. He will build a frontier wall to keep out Mexicans or as he put it recently: “We send our troops to defend other’s borders, why can’t we defend our own.”

He will impose limitations on the access of Muslims to the US. Not surprisingly the Mexico peso, which has yo-yoed up and down as Trump’s fortunes waxed and waned in the opinion polls, has suffered its greatest collapse in its value against the US dollar since Trump’s electoral victory.

Trump he has said will repudiate and renegotiate trade deals in the interests of protecting American jobs and national interests.

It is a potentially revolutionary agenda.

Not surprisingly Trump’s electoral victory has been greeted with dismay in many international capitals from Berlin to Brussels to Mexico City.

But in Brexit obsessed London, prime minister Theresa May, who is one of the few British politicians who has not publicly criticized Trump, see opportunities for a better trade deal than she could have hoped for under President Obama, who said that Britain outside the EU would be “last in the line” (he actually said last in the “queue” using the British and not the American word.)

In Moscow, meanwhile, the reaction to Trump’s unexpected victory was all delight. Trump is seen by Vladimir Putin (unlike Hillary Clinton) as being a much more workmanlike partner in improving US-Russian relations.

But the test may come much sooner than Trump wants.

The Russian battle fleet is already assembled on the Syrian coast. Putin with his ally President Assad will undoubtedly strike the rebel areas of Aleppo before President Trump assumes office in January.

Putin is famously skillful at creating “facts on the ground.” He has done so in the past and there is no reason to believe he will not do so again while the U.S. is preoccupied with a totally unexpected and unprecedented presidential succession.

So there is much to worry about.

An untested American president is arriving in a very dangerous world. The domestic agenda will upend much of the consensus of recent decades.

And a formidable potential challenge to international business, financial and policy elites, which have in Trump’ s worldview, have stacked the cards against the average American worker.

The world will not be the same under president Trump.

That much is sure.

Editor’s Note: We have consistently taken Donald Trump and his candidacy seriously. 

That puts is in a distinct minority. 

Now the press which could not do anything but support the political mobilization of his critics and opponents and the Inside the Beltway strategists are now going to get it right about Trump and his Administration’s path to the future?

In our next SLD Forum to be launched shortly, we are going to address the challenges and the way ahead for Trump and his Administration in defense and foreign policy.

He comes to power when first order principles worldwide are in turmoil; he is prepared to look at first principles and to shape new paths and approaches.

We have been the first to the Whiteboard in taking Trump seriously PRIOR to him becoming the President-elect.

We will continue to do so and to be more than willing to criticize those in the “policy elite” who believe their outmoded views simply prevail over the new President, his Administration and the American people.

If you wish to comment on this article, you can do so on the Second Line of Defense Forum:

http://www.sldforum.com/2016/11/president-elect-trump-revolution-no-less/

Also see Dr. Maxwell’s earlier piece: