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The Crown Capital Management International Relations A troubled relationship frays further
 

The Crown Capital Management International Relations A troubled relationship frays further

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Driven by political one-upmanship at home, Russia and the U.S. are hitting out at each other with domestic legislation

Driven by political one-upmanship at home, Russia and the U.S. are hitting out at each other with domestic legislation

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    The Crown Capital Management International Relations A troubled relationship frays further The Crown Capital Management International Relations A troubled relationship frays further Presentation Transcript

    • The Crown CapitalManagementInternational RelationsA troubled relationshipfrays further
    • President Barack Obama shakes hands with Russia‟s President Vladimir Putin in a bilateral meeting during the G20 Summit, Monday, June 18, 2012, in Los Cabos, Mexico.
    • Driven by political one-upmanship at home, Russia and theU.S. are hitting out at each other with domestic legislationFor Russia and the United States, this year began with a newrow that revived the atmosphere of a Cold War and deepenedthe political crisis in Russia.As 2012 drew to a close the two countries adopted legislationpenalising each other for alleged human rights abuses.Shortly before the New Year, U.S. President Barack Obamasigned into law a bill that blacklists Russian officials allegedlyimplicated in the death of Russian lawyer Sergei Magnitsky andin other “gross violations of human rights.” The 37-year-oldlawyer, in 2009, died in a Russian prison where he was sent toby some Interior Ministry officials after blowing the whistle ontheir multi-million tax scam.
    • Russia hit back by adopting an “anti-Magnitsky” law that notonly mirrored American sanctions but also banned U.S.adoptions of Russian orphans. It is for the first time in thehistory of their relations that Russia/the Soviet Union and theU.S. have resorted to blacklisting each other‟s citizens on thebasis of their human rights record.In the opinion of Russia‟s Foreign Minister Sergei Lavrov,the Magnitsky Act was a Republican conspiracy to destroyMr. Obama‟s “reset” policy of constructively engagingRussia. The U.S. Congress adopted the Magnitsky Act on thesame day it finally repealed the four decades-old Jackson-Vanik amendment, which required Russia to undergo everyyear a humiliating certification of its human rights record toqualify for normal trade relations with the U.S.
    • Russian President Vladimir Putin called the U.S. move a“slap” in Russia‟s face.“Why does one country feel entitled to extend itsjurisdiction to the entire world? This undermines thefundamental principles of international law,” he told a pressconference last month.Americans, who “keep people jailed for years without beingcharged” at Abu Ghraib and Guantánamo and who “havelegalised torture in their own country,” have no businesslecturing Russia on human rights, the Russian leader said.
    • LEAVING THE DOOR AJARDespite Russia‟s anger, its response to the Magnitsky Act was largely asymbolic gesture that did not really hurt U.S. interests. Hardly any Americanofficials will be harmed by not being able to travel to Russia or keep theirmoney in a Russian bank. Analysts were quick to note that if Mr. Putin reallywanted to hit the U.S. where it hurts he could have imposed restrictions onAmerican companies in Russia or shut off U.S. logistics lifelines toAfghanistan that run through Russia. By sparing U.S. interests, Mr. Putin senta signal that Moscow is still open to doing business with Washington.However, the U.S. sanctions and the Russian retaliation badly poisoned the airbetween the two countries. Both sides promised to keep adding new names totheir blacklists of persona non grata.“The „reset‟ is unravelling at the seams,” said political scientist BorisShmelyov. “The two countries are a step or two away from a new round of theCold War.”
    • ADOPTIONS AND PUTIN’S IMAGEThe ban on American adoptions of Russian orphans, especiallychildren with disabilities, hardened Mr. Putin‟s image in the West as acruel and vindictive autocrat, who used children as hostages in hispolitical disputes with Washington. Critics said that for tens ofthousands of Russian disabled orphans, foreign adoption was the onlychance to find a family. Russians almost never adopt such children asthey need expensive treatment and rehabilitation that are not availablein Russia for free. Children with serious health problems accounted fora fair share of more than 60,000 Russian orphans adopted byAmericans over the past two decades.Mr. Obama will now come under increased pressure from the Congressto put human rights at the top of his Russia agenda. Several Europeancountries are weighing the option of adopting their versions of theMagnitsky Act.
    • While the Magnitsky Act was driven by U.S. political battles, the “anti-Magnitsky” law had more to do with Russian domestic politics than withforeign policy. Apart from outlawing U.S. adoptions, the Bill allowsRussian authorities to ban “politically-active” non-governmentalorganisations (NGO) that receive American funds or engage in activitiesthat “represent a threat to the interests of the Russian Federation.” It alsobars Russians who also have dual Russian-American citizenship fromparticipating in political NGOs. Mr. Putin thereby sought to kill two birdswith one stone: strike a blow against his foes and boost popularity amonghis conservative constituency by stoking anti-Americanism. In a recentpoll, more than 75 per cent of Russians said that they supported the ban onAmerican adoptions of Russian orphans.At the same time the adoption ban met with indignation among the moreenlightened middle classes and reignited urban protests that were sparkedby Mr. Putin‟s decision to reclaim the presidency last year. Up to 30,000demonstrators marched through central Moscow earlier this monthdenouncing the ban as “cannibalistic” and branding its advocates“scoundrels.”
    • ATTEMPT AT CONSOLIDATIONAnalysts said Mr. Putin is trying to firm up his grip on power by pitting theconservative working class provinces susceptible to manipulation by state-run television against the increasingly Opposition-minded big cities.The Kremlin “hopes to consolidate sections of society on the issue offoreign encroachment on Russia‟s sovereignty,” said analyst DmitryOreshkin. “The Kremlin narrative is: „there are enemies all around, so wemust rally around our leader‟.”However, Mr. Putin‟s tactic had a bad downside: it provoked a split in theRussian elites. For the first time in recent history, several senior ministers,including a Deputy Prime Minister and the Foreign Minister, registeredtheir opposition to the orphan adoption ban on the grounds that it violatedRussian and international legislation. The disagreement was apparently notserious enough for any of the ministers to resign, but it may be just the tipof an iceberg.
    • One section of the elite — modernisers — favour liberalisation andforeign investment to speed up growth¸ while the other more conservativesection, dominated by security cadres, fear that greater openness to theworld would undermine their positions in power and therefore advocatetightening the screws on the Opposition and building new walls betweenRussia and the West.“The conflict that has long been brewing in society has now spilt over tothe ruling elite, which until a few months ago was united,” saidbillionaire Mikhail Prokhorov, who last year ran for President and set uphis own party, Civil Platform.Mr. Putin, who had long played the role of above-the-fight arbiter forrival power groups, is now seen to have joined the conservatives. Expertssaid his demonstrative refusal to investigate and prosecute the officialsblamed for Magnitsky‟s death showed how much he treasures the supportof security clans, while the adoption ban demonstrated how little he caresfor his international reputation and Russia‟s relations with the West.The “anti-Magnitsky” law “is a catastrophe for Mr. Putin. The road takenby the Kremlin will soon lead to a real crisis of his legitimacy,” said GlebPavlovsky, a former Kremlin PR strategist.