Black cash policy

Agency WPS
What the Papers Say. Part A (Russia)
September 21, 2004, Tuesday

BLACK CASH POLICY

SOURCE: Novaya Gazeta, No 69, September 20, 2004, EV

by Anna Politkovskaya

It is common knowledge that in the days following the Beslan horrors
Putin and Ivanov (the defense minister, that is) failed to come up
with anything better than George W. Bush once, and promised to
deliver preemptive strikes at terrorist bases no matter where the
latter were found. Everybody knew that the matter concerned Georgia,
a Georgia without Eduard Shevardnadze that was slipping more and more
from under Moscow’s control. Why does the Kremlin hate Georgia so
much? Why does Georgia resist the Kremlin’s control so much? And why
does this resistance irk the Kremlin? What is there about the country
and its authorities that enable the Kremlin to think in terms of
bombing the territory of this country?

In answers to these questions, we will go from the simple to the
complicated because a lot of catastrophic cataclysms in the
international relation are rooted in primitive things.

Sure, President of Georgia Mikhail Saakashvili is a wonder child. He
is handsome and a pet politicians of journalists throughout the
world. Putin has long since got rid of wonder children and handsome
pets of foreign journalists in his own entourage.

A few words about the Georgian “court” now. What do Putin and his
retinue see and hear during their meetings with Saakashvili?

These days, the president of Georgia begins with his senior adviser.

“My name is Daniel Kunin,” he says in perfect English.

He is likable and young. Kunin wields substantial clout with the
chancellor’s office where everybody speaks English nowadays.

Just imagine men from Putin’s presidential administration in this
atmosphere – the men used to seeing all of the CIS kneeling before
them…

This is what official Tbilisi is like nowadays: it can be summed up
in three words only – American workaholic management. West-oriented
management. No North-West as the guiding light, no political
unpredictability so typical of the Kremlin. Georgia under Saakashvili
is anti-Byzantinism. Anti-bureaucracy. Anti-hierarchy. Anti-colony.
The Kremlin is polar to all of that. Neo-Soviet Byzantinism.
Arch-hierarchy. Longing for the past empire taking the shape of
bribery of former colonies (the gift to the tune of $800 million
worth of taxes to Ukraine and Belarus is the latest example). Policy
of provocation.

Saakashvili is quite clear in his words and statements. “Why do you
dislike us so much?” – we asked the Russians. “What are we doing
wrong?” We promised pensions and salaries to budget sphere employees
in South Ossetia, Is that bad?” he asked. “The Russians never
answered. Skirmishes began instead. We have American servicemen
stationed here. We say that we do not want an armed conflict, and the
Russians boost their strength by way of response. We are not going to
permit a repetition of what happened here in 1992 because it halted
all our reforms. We want to make Georgia attractive. Is that bad? We
do not understand what Russia wants from us. Its actions in Georgia
are extremely irrational…”

Mikhail Saakashvili: We used the international community to organize
an international conference on South Ossetia – on the status, on the
political solution to the problem. The UN, OSCE, European Union
agree. The Russians do not.

Question: When was your last conversation with Putin?

Saakashvili: I called him and was told that he is not available. I
sent two letters to Putin – no answer.

Question: What do you think of the statement of Ramzan Kadyrov,
Putin’s favorite in Chechnya, concerning the readiness to send his
fighters to South Ossetia and “solve the problem?”

Saakashvili: F… him!

And this is what was not articulated in my conversation with
Saakashvili. He spoke of the deaths of 16 Georgian servicemen as of a
catastrophe. “When 16 men were killed, I knew I had to make a
decision…” Saakashvili made up his mind and withdrew Georgian units
to a safe distance. To prevent new deaths…

I was struck speechless. By the contrast, that is. In Russia, the
deaths of 16,000 servicemen do not compel the president to save the
rest by ordering units and formations withdrawn to a safe distance.
This love of Saakashvili for his people is the worst problem for
Putin, who is convinced that he is rebuilding an empire and that the
undertaking is worth lives.

These are the irrational reasons behind the clash between the Kremlin
and Tbilisi. Here we come to rational ones, financial and economic.

What do Russia’s interests in the region boil down to nowadays? What
should Putin’s bureaucracy be fighting in the region for?

Firstly, Russia has to consolidate the so called Russian “Christian
axis” (Ossetian) as a counterweight to the Russian “Moslem
underbelly” (Chechnya, Ingushetia, Karachaevo-Cherkessia,
Kabardino-Balkaria, Dagestan, Adygeya). It is a necessity and it pays
therefore to keep in the focus of attention South Ossetia – a tiny
bit of land across the mountains from North Ossetia.

Secondly, Russia needs Abkhazia as well, a strip of land along the
Black Sea coast connecting Russia with Armenia – the Kremlin’s only
strategic partner across the mountains the United States has not
subverted yet.

Interests of Tskhinvali and Sukhumi are understandable too. They are
out of options. Tskhinvali all but admits that it wants unification
with Vladikavkaz and that is impossible without Moscow. Sukhumi
refuses to return to Georgia and since there must be someone it may
lean on, Moscow is regarded as the best available shoulder.

All of that is theory. In practice, however, all these “conflicts put
on hold” have become bona fide black holes. Political maps specify
South Ossetia and Abkhazia as parts of Georgia, but de facto they are
zones without taxes, transparent budgets, legitimate power
structures, and all the rest that distinguishes territories of the
law from those without.

What does the Kremlin needs these black holes for? First and
foremost, they are convenient to have handy. To transact black cash
there, to arrange all sorts of grey arrangements, etc. We are
fighting to ensure supremacy of the law only in words. Indeed,
official Moscow persists in its policy of support of the territories
that may be used to pump black cash into. They are zones for special
operations and classified instructions when no documents have to be
signed.

Russian policy remains a policy of black cash. Nothing happens
without it. Black cash is the principle of formation of our power
structures and branches of government. Artificially maintained chaos
instead of order is what is needed.

Having black holes like that abroad is quite convenient. They are
much more convenient than offshore zones where all sorts of covers
and smoke-screens are needed and where leaks remain a constant
possibility. South Ossetia and Abkhazia do not require all of that.

For the Soviet Union, the role of these black holes was played by
some African regimes. The Politburo called them “national liberation”
regimes, pumped party funds there, and pulled off its financial
operations. For Russia, this role was played by Chechnya where the
civilized banking system had never been established deliberately. But
Chechnya is in Russia which is a distinct inconvenience: there is
always the possibility of formal inspections, the possibility that
some uncorrupt prosecutor will turn up, and besides – appetites of
Kadyrov and Co are ever growing. Abkhazia and South Ossetia have been
infallible from this point of view. What cannot be pulled off
elsewhere can be pulled off there. It is possible to pump money,
weapons, and drugs there – and they are being pumped. No control or
accounting. Just throw something to the undemanding local regimes and
scream about “protection of Russian citizens.”

Putin put Shevardnadze under such a pressure that Shevardnadze, a
Soviet oligarch knowing perfectly well how and why these black holes
operate, gave in and transferred one-third of the territory of
Georgia into the zone of the Russian black cash. The new president of
Georgia changed everything. Saakashvili pronounced the intention to
deal with the “conflicts put on hold” and immediately became Russia’s
Enemy Number One. Adjaria was the province of Abashidze and worked
mostly for him, and Putin gave it up practically without a fight. For
Tskhinvali and Sukhumi, however, the Kremlin will fight.

This game on the part of the authorities of Russia costs us, ordinary
Russians, a good neighbor – Georgia.

Hence the conclusion: the policy of the Russian presidential
administration aimed at annexation of two Georgian territories does
not have anything to do with Russia’s strategic or any other
interests in the Caucasus.

Translated by A. Ignatkin