Interesting synopsis on Russia.
- GV
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From: Strategic Forecasting, Inc

Russia's Interest in Litvinenko

By George Friedman

The recent death of a former Russian intelligence agent, Alexander
Litvinenko, apparently after being poisoned with polonium-210, raises
three interesting questions. First: Was he poisoned by the Russian
Federal Security Service (FSB), the successor to the KGB? Second: If so,
what were they trying to achieve? Third: Why were they using
polonium-210, instead of other poisons the KGB used in the past? In
short, the question is, what in the world is going on?

Litvinenko would seem to have cut a traditional figure in Russian and
Soviet history, at least on the surface. The first part of his life was
spent as a functionary of the state. Then, for reasons that are not
altogether clear, he became an exile and a strident critic of the state
he had served. He published two books that made explosive allegations
about the FSB and President Vladimir Putin, and he recently had been
investigating the shooting death of a Russian journalist, Anna
Politkovskaya, who also was a critic of the Putin government. Clearly,
he was intent on stirring up trouble for Moscow.

Russian and Soviet tradition on this is clear: Turncoats like Litvinenko
must be dealt with, for two reasons. First, they represent an ongoing
embarrassment to the state. And second, if they are permitted to
continue with their criticisms, they will encourage other dissidents --
making it appear that, having once worked for the FSB, you can settle
safely in a city like London and hurl thunderbolts at the motherland
with impunity. The state must demonstrate that this will not be
permitted -- that turncoats will be dealt with no matter what the
circumstances.

The death of Litvinenko, then, certainly makes sense from a political
perspective. But it is the perspective of the old Soviet Union -- not of
the new Russia that many believed was being born, slowly and painfully,
with economic opening some 15 years ago. This does not mean, however,
that the killing would not serve a purpose for the Russian
administration, in the current geopolitical context.

For years, we have been forecasting and following the transformation of
Russia under Vladimir Putin. Putin became president of Russia to reverse
the catastrophe of the Yeltsin years. Under communism, Russia led an
empire that was relatively poor but enormously powerful in the
international system. After the fall of communism, Russia lost its
empire, stopped being enormously powerful, and became even poorer than
before. Though Westerners celebrated the fall of communism and the
Soviet Union, these turned out to be, for most Russians, a catastrophe
with few mitigating tradeoffs.

Obviously, the new Russia was of enormous benefit to a small class of
entrepreneurs, led by what became known as the oligarchs. These men
appeared to be the cutting edge of capitalism in Russia. They were
nothing of the sort. They were simply people who knew how to game the
chaos of the fall of communism, figuring out how to reverse Soviet
expropriation with private expropriation. The ability to turn state
property into their own property represented free enterprise only to the
most superficial or cynical viewers.

The West was filled with both in the 1990s. Many academics and
journalists saw the process going on in Russia as the painful birth of a
new liberal democracy. Western financial interests saw it as a
tremendous opportunity to tap into the enormous value of a collapsing
empire. The critical thing is that the creation of value, the
justification of capitalism, was not what was going on. Rather, the
expropriation of existing value was the name of the game. Bankers loved
it, analysts misunderstood it and the Russians were crushed by it.

It was this kind of chaos into which Putin stepped when he became
president, and which he has slowly, inexorably, been bringing to heel
for several years. This is the context in which Litvinenko's death --
which, admittedly, raises many questions -- must be understood.

The Andropov Doctrine

Let's go back to Yuri Andropov, who was the legendary head of the KGB in
the 1970s and early 1980s, and the man who first realized that the
Soviet Union was in massive trouble. Of all the institutions in the
world, the KGB alone had the clearest idea of the condition of the
Soviet Union. Andropov realized in the early 1980s that the Soviet
economy was failing and that, with economic failure, it would collapse.
Andropov knew that the exploitation of Western innovation had always
been vital to the Soviet economy. The KGB had been tasked with economic
and technical espionage in the West. Rather than developing their own
technology, in many instances, the Soviets innovated by stealing Western
technology via the KGB, essentially using the KGB as an research and
development system. Andropov understood just how badly the Soviet Union
needed this innovation and how inefficient the Soviet kleptocracy was.

Andropov engineered a new concept. If the Soviet Union was to survive,
it had to forge a new relationship with the West. The regime needed not
only Western technology, but also Western-style management systems and,
above all, Western capital. Andropov realized that so long as the Soviet
Union was perceived as a geopolitical threat to the West and,
particularly, to the United States, this transfer was not going to take
place. Therefore, the Soviet Union had to shift its global strategy and
stop threatening Western geopolitical interests.

The Andropov doctrine argued that the Soviet Union could not survive if
it did not end, or at least mitigate, the Cold War. Furthermore, if it
was to entice Western investment and utilize that investment
efficiently, it needed to do two things. First, there had to be a
restructuring of the Soviet economy (perestroika). Second, the Soviet
system had to be opened to accept innovation (glasnost). Andropov's
dream for the Soviet Union never really took hold during his lifetime,
as he died several months after becoming the Soviet leader. He was
replaced by a nonentity, Konstantin Chernenko, who also died after a
short time in office. And then there was Mikhail Gorbachev, who came to
embody the KGB's strategy.

Gorbachev was clearly perceived by the West as a reformer, which he
certainly was. But less clear to the West were his motives for reform.
He was in favor of glasnost and perestroika, but not because he rejected
the Soviet system. Rather, Gorbachev embraced these because, like the
KGB, he was desperately trying to save the system. Gorbachev pursued the
core vision of Yuri Andropov -- and by the time he took over, he was the
last hope for that vision. His task was to end the Cold War and trade
geopolitical concessions for economic relations with the West.

It was a well-thought-out policy, but it was ultimately a desperate one
-- and it failed. In conceding Central Europe, allowing it to break away
without Soviet resistance, Gorbachev lost control of the entire empire,
and it collapsed. At that point, the economic restructuring went out of
control, and openness became the cover for chaos -- with the rising
oligarchs and others looting the state for personal gain. But one thing
remained: The KGB, both as an institution and as a group of individuals,
continued to operate.

Saving the System: A Motive for Murder?

As a young KGB operative, Vladimir Putin was a follower of Andropov.
Like Andropov, Putin was committed to the restructuring of the Soviet
Union in order to save it. He was a foot soldier in that process.

Putin and his FSB faction realized in the late 1990s that, however
lucrative the economic opening process might have been for some, the net
effect on Russia was catastrophic. Unlike the oligarchs, many of whom
were indifferent to the fate of Russia, Putin understood that the path
they were on would only lead to another revolution -- one even more
catastrophic than the first. Outside of Moscow and St. Petersburg, there
was hunger and desperation. The conditions for disaster were all there.

Putin also realized that Russia had not reaped the sought-after payoff
with its loss of prestige and power in the world. Russia had traded
geopolitics but had not gotten sufficient benefits in return. This was
driven home during the Kosovo crisis, when the United States treated
fundamental Russian interests in the Balkans with indifference and
contempt. It was clear to Putin by then that Boris Yeltsin had to go.
And go he did, with Putin taking over.

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