Economic dimensions in Russophilia or how to convert ideas into business – Part One

Economic dimensions in Russophilia or how to convert ideas into business – Part One

russia

 

You will not grasp her with your mind
Or cover with a common label,
For Russia is one of a kind –
Believe in her, if you are able.*

Fyodor Tyutchev, 1866
(Transl. A. Liberman)

 

For years on end I have been looking for logic in the actions of politicians and businessmen who insist on advertising themselves as Russophiles. With this clarification, I intend to exclude from the scope of this analysis idealists who claim to have an intangible/spiritual, quasi-religious devotion to everything Russian. Many of them do not speak Russian, nor do they have an in-depth knowledge of Russian literature and culture, yet they have been indoctrinated in the folklore of the Soviet Union and Russia as instilled since our childhood. However, do not think for a moment that these people are lacking followers amidst the younger generations or that the transition from communism has not given life to new Russophiles. There is still the common denominator of never casting a shadow of doubt on the infallibility of the actions of the Russian tsar or Soviet leader respectively, amongst its local Bulgarian disciples. These people cannot by default be blamed for their unbalanced interpretation of the bilateral relations that are in place to this day, involving myths and legends and the resultant branded perspectives on the past and future alike. There are missing pages in the history books on Russia or the Soviet Union abusing Bulgaria or if there are a few, they have been labeled merely hostile propaganda. The great Bulgarian writer, Ivan Vazov, never asked Russians why they were in Bulgaria, General Kolev never fought them in Dobrudja, there never was an occupation by the 300 thousand strong Soviet Army which de facto occupied the country and forcibly installed an unelected regime which served to obliterate the elite of Bulgaria etc. etc.

 

tank tuk

Although it is a fact that the influence of the West in our country does not always boast a positive history, there is at least a balance for contemporary Bulgarians to acknowledge. The blind and completely irrational gratitude to Russia and the Soviet Union practically gives no chance for national consensus, nor for a balanced and independent assessment of our national security and development needs, when an objective and independent assessment of Russia’s real actions past and present are required. To this extent, hard-line Russophiles, as Russian sociologist Sergey Baranov wrote recently, are primarily part of the Russian nation. It is only when this is understood that we can consider them as secondarily part of the Bulgarian nation, because they would rather turn against the other part of the Bulgarian nation than against their patron.

 

If we fail to master this risk to national security by isolating it and ideally putting it into therapy when any conflict between Russia and EU/NATO arises, we will continue to encounter division and internal confrontation and governance paralysis in performing our duties as members of those organizations.

 

This article dwells mainly on the relationship between russophilia as an ideological matrix and its impact on the Bulgarian economy and politics to the extent that it affects and determines business development.

 

A large number of Russophiles in politics and business are not against the EU and NATO, at least in theory. They benefit largely and are even often the first in line when it comes to the advantages of European subsidies. They consider as a given both NATO security guarantees and access through the EU to the European market of goods, services, labor and capital. However, many of them have never managed to overcome their almost instinctive rejection of the western world, liberal values and European modernism in the political, economic and socio-cultural life.

 

Upon hearing that Russia is simply uncompetitive because it does not produce business or scientific achievements or breakthroughs with global significance in technologies beyond the military, the Russophiles will immediately revert to their almost religious faith under the slogan “There is no match to Russia”. They will keep reiterating that for them the intangible, spiritual, is important and it will save their souls from the influence of the degenerate West.

 

Each of them would struggle to name a few global achievements by people working in Russia who have made headlines in the world press in recent years. Still, they are full of quotes about weapons “without equal” that Moscow could use at any time to destroy the Western world and its infidels. Self-evidently, there is little difference in the degree of extreme negation between religious and ideological extremism, which in both cases leads to some form of jihad against those professing different ideas.

 

For our Russophiles, Russia is an internal psychological counterweight to the difficult process of rationalizing globalization and modern Enlightenment, which reflects a mixture of provincialism and insularity, a dose of healthy conservatism and innate reluctance to accept order, procedures, rules, even systematic development, which any European civilization follows.

 

Russia is a different world with self-sufficient logic that cannot be understood with the mind “to quote Tyutchev”, hence irrationality and unpredictability are its natural state. The West lives according to its own rules, therefore it is welcome to recognize the sovereignty of borders as a cornerstone of international order and security, while Moscow views Crimea borders as “contingent”, in the words of the historian Andrei Pantev,  so Russia has not violated them!? Such are the borders of Georgia, Abkhazia and South Ossetia, or Moldova’s or those of Eastern Ukraine and any other country that stands in the way of Russian or Russophile beliefs.

 

If this is not a recipe for anarchy and chaos in international relations, then what is?

The Russian model with corrupt oligarchic dominance that promotes belonging to the caste of the party, administrative employees or business nomenclature is much more acceptable for our Russophiles. In this sense, political and business russophilia has now settled in its ideal nutritional and reproductive environment that allows the conversion of ideas and relationships into concrete political and business benefits. For those in receipt of such benefits, russophilia is a perfectly rational behavior.

 

Russophiles in politics and business are hiding behind calls for Bulgaria not to participate in NATO’s collective measures for security in the Black Sea, concerning  Russia, not because they worry about the fate of the regime in Moscow so much. Should Bulgaria integrate more efficiently into the EU and NATO in particular, it would pose a threat to their freedom to go beyond the rules, procedures and principles by using business and political schemes with their Russian partners, as they would be forced to comply with such rules, procedures and principles. This would dramatically limit their opportunities to connive and implement new “grand slam” arrangements for gaining massive benefits by mediation. Russophilia is a comfortable niche to exploit with a large potential for political and financial gains for a group of people who would have no chance in an open political and business competition environment in the European market.

 

The almost religious devotion of Russophiles is completely in line with the soberingly rational policy of political and business mediation exercised by Russian business and political interests in Bulgaria. Mention any field or sector and you will find projects of the “Grand Slam” involving mediation contracts of any kind, including PR and consulting. I recall the promotional campaign for the Belene project amongst the Bulgarian public. Rosatom poured nearly 10 million lev in their PR campaign, which were quickly absorbed with little effect demonstrating clearly that being a Russophile has been made into a profitable business by many businessmen, presenting themselves to be loyal to Russia. If we add the dormant and reflexive anti-Americanism and general denial of the West as an antithesis of their world where personal wealth reflects anything but hard work, it is not difficult to understand why Bulgarian society is being torn continuously by manufactured and irrational divisions between the Russophiles and the rest of society that seeks to play by the rules, thus making difficult and even impossible national consensus and solidarity which are so much needed in moments of ultimate tests for the nation.

 

It is nonetheless odd that both concepts of “philes” and “phobes” have been imported from Russia to serve as instruments of Russian foreign policy. From Moscow’s perspective, there is iron logic and programming efficiency in their promotion. Instead of disputes and controversies being formalized as interstate, between Bulgaria and Russia, they are being presented as domestic differences within the Bulgarian nation with the Kremlin in the role of an arbitrator.

 

INFLUENCE ON THE ECONOMY

Russia’s direct or indirect influence on the Bulgarian economy can hardly be overstated. According to numerous sources, most of them informal, because formal ones are not encouraged to focus their sourced data on the topic, at least 30% of Bulgarian economy is under the direct or indirect influence of Russian capital or associated with Russian interests and groups, often interacting with organized crime in both countries. There is no surprise here as every crime only exists as long as those in power allow. In the Bulgarian model, it just adds tools for exercising of power both in the visible and in the invisible parts of the spectrum.

рубла

To a large extent, the power and quality of modern business Russophiles relies on collaboration schemes interweaved with other capitals abroad and steered by the party, financial and intelligence nomenclature. One such example is the Icelandic billionaire Thor Björgólfsson, associated with Vladimir Putin’s early years in St. Petersburg and Russian capital, who developed extremely intense business in the country as the project “Neva” which was and still remains a source of many projects and schemes in the country.  The “on-the-side” activities performed in parallel with trade and other arrangements by large companies such as Gazprom and Lukoil are just some of the more visible parts of the scheme whose roots can be traced back to the influence exercised today in a number of industries as telecommunications and banking. Do not be surprised that companies branded as Western are nothing but proxies of Russian-Bulgarian investment schemes, keeping control and influence over the Government. Do not look at Russian-owned assets as a single source of influence but at the comprehensive mechanisms for such control and influence. A recent example is the influence of a Russian manager of Western companies on the conduct of media formally identified as “American”.

 

Besides their visible presence in the energy sector, including in the oil and gas domain, Russian and related capital control substantial assets in banking, media, industry, tourism, agriculture and transport.

 

Three major groups of Russian interest can be identified.

The first group includes assets in the Bulgarian economy, which represent Russia’s strategic interests and are being controlled at highest political level. Typically, they are realized by a Russian state corporate structure, but even where formally private ownership is involved, it is under the continuous and complete control of the Kremlin. Such is the case of  Lukoil, Rosatom, Gazprom and VTB. This group includes all strategic contracts for supplying parts or services in the military-technical sector. Key decisions on the realization of major projects, investments or trading are coordinated at political level. It is not just about the visible aspect of representation but about a myriad of companies (subsidiaries, contractors or subcontractors), both Bulgarian and Russian, which form a network for the realization of these commercial interests.

 

To the second group assets can be attributed, that make an indirect impact and which serve and complement the first group in areas where representation of Russian interests is not possible “due to EU or local regulation” or because informal channels are much more effective  insofar as they enable businesses to be branded as European, American or at least unrelated to Russia. Such are assets in the media, including digital and printed, tourism, culture and entertainment, restaurants, agriculture and even energy. I insist that assets perceived as American or Western in Bulgaria often have very strong Russian backing.

 

A similar case of entering the market via proxies is the Bulgarian Telecommunication Company with its ability to directly control a critical aspect of Bulgaria’s security – its telecommunications infrastructure.

 

The third group covers assets of ordinary Russian companies who trade or invest in Bulgaria, including those established by “immigrant” Russian businessmen in search of a European environment. Amongst them are a number of companies in the field of information technology, software companies, agriculture, services, real estate and tourism. These companies generally cannot be referred directly to the channels of influence of the Russian state, but quite often Russian business immigrants are under pressure through the use of related businesses or family members back in Russia. Recently there has been a rise in the use of various “small” commercial companies for political purposes, operating in hybrid fashion to make them difficult to detect. Quickly emerging paramilitaries are often branded as companies, namely in the services and security sectors, as well as serving and protecting Russian investments, including those in tourism.

 

The end of Part One

 

By Ilian Vassilev

Translated by Sacha Nikolova

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