The Protectionists have upped the ante
Russia's stubborn attempts to join the WTO reminded concerned parties that they need to hurry up and implement a series of protectionist measures in support of Russian manufacturers.
The bell tolled for dealers of new and used foreign cars in Russia. On Monday at a conference in Saransk, the capital of Mordovia, President Vladimir Putin sharply criticized the government for lacking the determination to raise import tariffs on foreign cars in order to stimulate Russia's automobile industry. At heart is an initiative by the Science and Industry Ministry to develop the motherland's auto industry. The initiative's proposals hit the government last week.
Proponents of raising import duties on foreign cars, and used cars in particular, argue that without immediate action the automobile industry will suffocate. And with new, stricter regulations on cars in Europe, cars not meeting new standards will naturally flood Russia. Since Russian cars are about as expensive and no one has any illusions as to their quality, foreign automobiles, even used ones, will win out. But if the main lobbyists for tariffs were considered lazy Russian producers who couldn't survive the slightest competition before, now they have some serious support. It's well known that Western giants like Ford, General Motors and Fiat are actively advising Russia, as a potential WTO member, to make use of certain advantages it has as a non-member and raise import duties on foreign cars. Western companies insist that if this is done they will begin their own production here.
The Science and Industry Ministry believed these promises and adopted even tougher measures than were initially considered. We are no longer talking about a 25 percent import tax on foreign cars to be implemented in three years, but a 35 percent tax to start immediately.
Despite being backed into a corner, Prime Minister Mikhail Kasyanov is trying to relieve the pressure of lobbyists and Western auto producers. According to an anonymous government source, without clear stipulations for the proponents of these measures, it would be irresponsible to go ahead with it. Western automobile producers have no intention of developing the automobile industry in Russia, and it's generally understood that they are creating fewer new assembly facilities in Russia, allowing them to import almost ready-to-drive automobiles practically duty free, and then add the finishing touches in Russia, he said. It's not hard to predict that local carmakers will just raise prices in order to increase profits without improving quality.
The White House assures us that it is finding a way to hold the lobbyists to their promises. But now that the protectionists have enlisted the support of Putin, Kasyanov will have to explain to the president why implementation is being delayed and simultaneously try to oppose the lobbyists. We're definitely in for another sweltering summer in Russia, marked by personnel shakeups if not financial cataclysms.
Moscow to Luzhkov; Kazan to Shaimiyev
The Kremlin has chosen to continue dealing with Tatarstan president Mintimer Shaimiyev, although this requires it to reconcile itself to Moscow Mayor Yuri Luzhkov most likely keeping his hands on the attractive administrative, political, and financial resources of the capital for yet another electoral term. Informed sources says this is the import of the Constitutional Court's Tuesday verdict, which brings to a close the regional leaders' battle for the right to run for another term of office.
The Court ruled that around 20 leaders of federation subjects, including influential figures such as Luzhkov and Shaimiyev, could run for re-election again. The court wisely deferred the fate of several other dozen leaders in the regions to local legislatures, as these figures do not have the overall significance of the above-mentioned politicians.
Not in the least doubting the legal foundations and independence of the decision, one can only wonder at the way the high Russian Themis, the goddess of justice, is politically reigned in.
In the end, the case hinged on how to determine when the federal law that limits the leaders of federation subjects to two terms went into effect. This is because several regional leaders were already in their second term when the law was passed, and the law itself stated that their terms of office were to be counted from the moment it went into effect. So Luzhkov and Shaimiyev will, in fact, be running for a third term. Although the new Kremlin team would prefer to limit the dangerous strength gathering among regional leaders, different options are more desirable.
On the one hand, there's Moscow the Klondike with its fantastic possibilities, dark past and doubtful present. But the city is run by an ambitious mayor, whose loyalty the Kremlin questions. Even if the Kremlin believes he isn't planning to take his personal political show to the federal level, it can't be happy about the situation since business in the capital is still rife with crime and there are giant leaks in the budget into unknown pockets.
On the other hand, there's Tatarstan, where the boss doesn't allow any kind of radical or separatist moods despite all the right conditions for them to develop. The supreme Mufti of Russian Muslims already openly says that the extremist Wahabism movement is growing among Tatarstan's spiritual leaders. Shaimiyev has the experience and authority to contain similar movements, but it's difficult to say whether he could stomp them out. But in the absence of a successor who would be loyal to Moscow, there's no other choice.
Ekaterina Larina is assistent editor of The Russia Journal. E-mail Katya at email@example.com