Monday, October 18, 2010

Window on Eurasia: Primorsky Kray Deputies Suggest Reviving a Regional Currency

Paul Goble

Staunton, October 18 – Several deputies in the Legislative Assembly of Primorsky kray in Russia’s Far East recently suggested re-introducing a regional currency much as that region and more than 20 others had in the early 1990s in order to make social payments and thus avoid public protests when there is a delay in the physical transfer of rubles from Moscow.
While there is no indication that that legislators there are prepared to take a step that would violate a 1995 Russian Federation law, Ruslan Gorevoy says in today’s “Novaya versiya,” the proposal shows that “subjects of the Federation are [even now] keeping their own currency from the early 1990s” (versia.ru/articles/2010/oct/18/poyavlenie_v_rossii_regionalnih_valut).
And that makes an examination of what many of the country’s regions and republics did at that time not only a matter of historical interest but quite possibly a model that some regional elites may follow in the event of the onset of a serious financial or political crisis in the Russian capital at some point in the future.
After the Soviet Union fell apart in 1991, Gorevoy writes, the value of the ruble fell so rapidly that Moscow was often incapable of supplying the regions with the physical currency to pay what the government owed the population. And as a result, he says, “the Russian government secretly permitted 20 some regional leaders to print their own money.”
Other regional leaders soon followed, and had any of them shown real initiative, businessman Artyom Tarasov says, after only a few years no one in the Russian Federation would even have had a memory about the ruble. But most, locked in Soviet-style caution, didn’t push these regional currencies very hard, and they circulated right alongside the ruble.
“Only in 1995,” Gorevoy continues, did Moscow adopt a law on the Russian Central Bank, one of whose provisions (Article 27) was that “the introduction on the territory of the Russian Federation of other monetary units and the production of monetary surrogates is prohibited.”
But as the “Novaya versiya” writer suggests, “if in the Far East or in Kaliningrad there isn’t enough money to deal with budget allocations, the local powers that be could perfectly well say to Moscow that there isn’t enough cash and thereby provoke in this way new conversations about their own money, ‘not tied’ to Moscow.”
Tatarstan was “one of the first” to introduce its own currency, taking that step already in the summer of 1990. It then imported currency printed in Britain in February 1992 with plans to introduce it on January 1, 1994. The reason, Tarasov says, is that Kazan didn’t want to take that step at the same time as others and thus prompt Moscow to come down on all of them at once.
At that time, the businessman continues, Yegor Gaidar had a plan for such currencies: they were supposed to function “on an equal basis with the ruble but only on the territory of the Russian Federation.” They were not to be used internationally – “in any case, according to the federal powers that be.”
Such local money was “immediately issued” in Nizhny Novgorod, Khakasia, Blagoveshchensk “and a number of other cities” and regions across Russia. There were many problems and curiosities: In Nizhny, the bills were so poorly printed that counterfeiting was simple and thus widely practiced.
Because of that, they were quickly replaced by government bonds. The bonds were then paid off, “and the unsuitable rubles destroyed – and this is the only case when ‘separatist’ money was not carefully saved until better times.” Elsewhere the physical bills generally have been retained, even if they are not honored as legal tender.
Meanwhile, in Blagoveshchensk, the local authorities wanted to avoid Moscow’s anger and so they had the currency they needed issued by an industrial concern as internal accounting funds. The name of the firm was SOPPIT, and that became the name of the denominations. “Sopps circulated alongside the ruble until 1995.”
The most famous case of regional currency involved the Urals francs printed up by Governor Eduard Rossel after he secured Gaidar’s approval. He said he had warned the Moscow official that planned reforms would leave Western Siberian governments without the currency they needed to make payments, and Gaidar agreed to the issuance of that regional currency
Many “Urals francs” are still around. “In 1996 and again in 1998, the Office of the Procurator General sanctioned the destruction of these bills,” Gorevoy says, “but this was not done.” And people there, he implies, appear to be retaining them less as curiosities from the past but as potentially valuable pieces of paper.
The most curious case of regional currency involves Chechnya. In early May 1993, the Central Bank of the Russian Federation and the National Bank of the Chechen Republic, at a time when Dzhokar Dudayev was president, signed an agreement on money, “in which was de facto recognized the financial-credit sovereignty of the republic.”
Six months later, the Chechen authorities decided to issue their own bills and ordered them from a British firm. The bills were printed but the war prevented their widespread introduction. More recently, Gorevoy says, there have been rumors that current Chechen head Ramzan Kadyrov has had all the rest of the print run transferred.
If that is the case, the “Novaya versiya” journalist asks rhetorically, “why did he do so?”
But if Chechnya is not thinking about having its own currency again, others apparently are. Tarasov told Gorevoy that “at the present time, the prospects for the appearance in Russia of regional currencies exist,” and those prospects will only brighten if the economic and political clouds over Moscow darken.

Window on Eurasia: Islamist Radicals Waging ‘Aggressive Religious War’ Against Traditional Islam in the Middle Volga Region, Mordvin Mufti Says

Paul Goble

Staunton, October 18 – Islamist radicals, often with roots in foreign countries, are now waging “an aggressive religious war” against the traditional Muslim communities of the nations of the Middle Volga, a conflict that could ultimately involve violence and chaos, according to the head of the Central Muslim Spiritual Directorate (MSD) of Mordvinia.
In an interview with Interfax-Religion.ru, Mufti Fagim Shafiyev argues that “the virus of religious radicalism is an effective weapon and instrument” of those who seek to gain power by weakening others, and he acknowledges that “this spiritual illness” at present has spread throughout the Muslim community more than any other.
The reason for that is “the naïve economic experience [of that community], its lower level of education, patriarchal way of life and political passivity,” Shafiyev continues, and those who want to conduct “’a dirty little war’” thus have chosen that community to “create administered chaos” (www.interfax-religion.ru/islam/?act=interview&div=293&domain=3).
Until recently, this conflict existed most obviously among the Muslims of the North Caucasus between the Salafis and the Sufis; but now, the mufti says, it has spread to and is intensifying in the Middle Volga, the traditional home of the most moderate form of Islam, one fully compatible with Russian political life.
And what makes this virus so dangerous is that those who make use of it as a weapon often lose control of their creation, and “having led the genie out of the bottle,” find that they are harming “not only innocent people but even the creators” of such ideas, “most of all, the Muslims of a traditional direction who do not share the views of the extremists.”
In this scenario, Mufti Shafiyev argues, it is precisely the traditional Muslims who become the first innocent victory of the informational, political and economic wars that have been unleashed and that rapidly shift into armed confrontation. Today, the danger of the transition to this phase is greater than ever before for the Middle Volga.”
According to Shafiyev, this situation also reflects the choice that Muslims in Russia have had to make “between unrestrained freedom and spiritual security.” As a result of the appearance of freedom of conscience and belief, the threat of religious radicalism and splits has grown. In other words, everyone received freedom but many did not add conscience to it.”
Shafiyev notes that the extremists or “new Muslims” as he calls them insist on purity of belief, something they argue can be achieved only a return to the principles of the time of the Prophet and “the Arabization of Muslims,” an argument many Muslims of the Middle Volga find superficially attractive.
The Muslims of the Middle Volga, the mufti points out, “consider any Arab or arrival from the East a real Muslim even though among the latter are also to be found Christians, representatives of various sects and tendencies of Islam and even unbelieving, completely secular people.”
These people, he notes, “preserve their identity even here in Russia,” even though they insist that other Muslims give up their national distinctions” Why must we Russian Muslims who represent various nationalities lose our unique national identity in favor of that of those who have come to us? This is impermissible.”
But unfortunately, he says, the Muslims of Russia are not in a good position to resist because as a result of this “aggressive religious war,” they are being forced to take part in “a discussion about which we earlier did not have any idea but which [as a result of this lack of preparation] leads to splits and divisions.”
To counter this, Shafiyev argues, “we must strive to achieve canonical unity in each particular country while there is not hope for the achievement of unity of the worldwide umma.” And the Muslims of Russia must launch “an attack on all fronts,” one that takes into account the fact that “the forms of struggle by the enemies of traditional Islam have changed.”
That will require the distribution of more and better information about Islam and its enemies. At present, the mufti notes, “there is no regular Muslim programming on television, no major professional federal Muslim newspaper, and no reliable information source about orthodox Muslims in Russia.”
Those shortcomings, he insists, not only “disorient many foreign Muslims” about the nature of Islam in Russia but also “push Russia’s Islamic youth to search for spiritual values outside” of that community, a trend that Islamist radicals are all too ready to exploit and turn against the Muslim community of Russia.
Some may inclined to dismiss Mufti Shafiyev’s remarks as the latest effort of a Muslim leader to put pressure on the Russian government to provide more resources or to support the formation of a single MSD with tighter controls over individual parishes across the Russian Federation.
But that would be a mistake because his most important message is that the struggle within Islam that has been taking place in the North Caucasus has now spread to the Middle Volga, the heartland of traditionally moderate Russian Islam, and that this struggle, more than attacks from outside Islam, is likely to dominate events there in the coming months and years.

Window on Eurasia: Russian General Staff to Experiment with ‘Mono-Ethnic’ and ‘Mono-Religious’ Units

Paul Goble

Staunton, October 18 – Confronted by growing violence in the ranks often along ethnic and religious lines and by calls from the Russian Soldiers’ Mothers Committees not put their sons in units with people of other nationalities, Moscow is planning to set up as an experiment some “mono-ethnic” and “mono-religious” battalions, according to a Moscow newspaper.
In “Nezavisimaya gazeta” today, Vladimir Mukhin reports that because of the growth of “dedovshchina” in the Russian military – officials say it is up by more than a third over the last year – the General Staff is studying the experience of “the Savage Divisions” as the mono-ethnic units at the end of the Russian Imperial period were known (www.ng.ru/printed/246560).
An anonymous source in the General Staff told Mukhin that the high command sees the formation of such units in which would serve “individuals of a single nationality or followers of a single religion” as “a way out of the situation” in which violence and indiscipline has become commonplace.
The source added that these units will be formed as “an experiment” in several of the strategic commands and will resemble the already existing East and West battalions in Chechnya, yet another way in which Chechnya is having an impact on Russian life far beyond the borders of the North Caucasus.
Yury Netkachev, a retired lieutenant journal and frequent commentator on military affairs, told the Moscow daily that “in essence, this is a return to the experience of ‘the Savage Divisions’ which existed first in the army of the Russian Empire and then for a certain time in Soviet forces.” And he suggested that the idea had merit.
The Russian military leadership shares that view and sees the formation of such units as a means of avoiding a continuing rise in the number of criminal cases involving clashes between the increasingly numerous non-Russian and non-Orthodox troops and Russian soldiers, who as a result of demographic decline form an ever smaller share of those in uniform.
Over the past months there have been a number of clashes along ethnic and religious lines in the Russian army, most recently at the Sokol Air Base near Perm where soldiers from the North Caucasus refused to obey orders and the commander turned to the local mufti for assistance.
According to Colonel Vladimir Popov, a historian and specialist on the Caucasus, the reported cases are only the tip of the iceberg, and the extent of this problem is far greater than many assume. He noted that in the formation of units in Chechnya, the General Staff had even established a special rule on the balance of Caucasians and Russians.
If there are too many soldiers from the Caucasus relative to the number of Russian commanders, the former often refuse to obey the latter. And that problem is now spreading, he said. “With the deteriorating demographic situation and the higher birthrate in the North Caucasus, Muslim draftees from there will soon form more than half of the entire contingent of the Russian Army.”
“On the one hand,” he said, “it would be better if they all served in one unit and were commanded by officers from their own region” But such an approach carries with it problems of its own: What happens if at some point “entire battalions” formed in this way “refuse to subordinate themselves to the Ministry of Defense as happened in June 1941.”
Retired Major General Vladimir Bogatyrev, a member of the Association of Units of Reserve Officers, is even more worried about the consequences of forming mono-ethnic or mono-religious units. Doing so, he said, “will not save [the army] from the problems” of insubordination and violence.
Those can be overcome only if officers learn how to better work with soldiers as educators as well as commanders, something he suggested the current leadership of the defense ministry does not appear to understand. And he said that restoring “the Savage Divisions” would be a mistake: A century ago, many of the peoples of the empire “did not know Russian.”
But today, he continued, “the situation is different. Russia is trying to build a democratic society. And corresponding to that, its army must be both democratic and international.” If it isn’t, he clearly implied, then the Russian Federation faces an increasingly problematic future, one that might involve either collapse or even greater authoritarianism.
The “Nezavisimaya” article did not discuss in any detail the history of the Savage Division of the last years of the Russian Empire, but there is one aspect of their history that may also be playing a certain role in the thinking of those at the top of the Russian military and political system now.
The units that made up the Savage Division were among the most disciplined and combat ready in the Russian Imperial Army, and perhaps most relevant now, they were the last to be infected by the revolutionary spirit that ultimately destroyed not only the Russian Imperial Army but the Russian Empire itself.