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Business Recorder
08-07-2025
- Politics
- Business Recorder
Taliban regime recognition
History is subject to strange twists and turns. One such is the decision by Russia to recognise the Afghan Taliban regime, the first and only country so far to do so. One hardly needs reminding of Russian sensitivity on the issue, given that the Afghan Taliban emerged from the womb of the Mujahideen who fought the Soviet occupation with the help of Pakistan and the US-led west for a decade, following which Russia (then the Soviet Union) finally decided to call it a day and withdrew in 1989 after Gorbachev assumed the leadership in Moscow. Arguably, that defeat, or rather being fought to a stalemate, fed into the troubled waters afflicting the Soviet Union and its ultimate collapse. The intriguing question is, why has Russia, given this painful past, 'jumped the gun' in this regard before China, India or even Pakistan?** For one, Russia is seeking to expand its diplomatic footprint globally, including south west Asia, in order to reverse the isolation into which the US-led west has been trying to push it since the outbreak of the Russia-Ukraine war. Its decision to formally exchange ambassadors therefore smacks of realpolitik, strategic opportunism, and positioning itself to engage in economic cooperation with the region in the fields of energy, transport and infrastructure. For Pakistan, troubled as it is by the conscious or tacit hosting of the Tehreek-i-Taliban Pakistan (TTP) and other hostile groups on Afghan soil, Russian lack of leverage over the Afghan Taliban in this regard offers little hope of the betterment of the fraught situation on the Afghan-Pakistan border. Although recent diplomatic moves aided by China, including a visit to Kabul by Deputy Prime Minister and Foreign Minister Ishaq Dar, show signs of improving diplomatic relations between the two neighbouring countries, this is still some way from Kabul halting completely the attacks on Pakistan by the TTP, Hafiz Gul Bahadar Group and other fundamentalist groups based on Afghan soil. Russia's diplomatic initiative may well persuade other countries to follow suit. Moscow has recognised the Taliban regime as an acceptance of its de facto control of the country, with little or no resistance left to its stranglehold. Of the countries interested in recognition, China stands out most. Beijing's interest in rare earth and other minerals in Afghanistan is by now a matter of record. China also seeks to blunt the presence and activities of religious extremist and fundamentalist groups such as Islamic State and al Qaeda based in Afghanistan lest this affliction spills over to its restless Xinjiang region, where an Islamic resistance movement has been controlled after much effort stretching over many years. If the Afghan Taliban were to accept good advice, or be willing to learn from the past, they need look no further than Pakistan's experience of supporting proxies in the long war for control of Afghanistan. Not only did Islamabad's Afghan proxies nurture and give birth to the Pakistani Taliban, by now even the so-called 'good' Taliban (TTP, etc) have long since turned against it. If Kabul hopes to use the TTP and similar groups to change Pakistan into a mirror of what it has implemented in its own territory, it should heed the well-meaning warning about proxies being double-edged swords, as Pakistan can ruefully testify from its own experience. Pakistan has clearly stated after the Russian recognition announcement that it is in no hurry to extend recognition, pending the hoped for improvement in the behaviour of the Afghan Taliban regime in scotching the cross-border attacks of the TTP, etc. If that is the case, that recognition by Islamabad may be some way down the road because Kabul's ostensible moves to prevent cross-border attacks by the TTP and others seem more window dressing than consistent, serious policy. As to the Afghan people themselves, precious little except hope for economic and other betterment in a country afflicted with want and hunger, in the wake of Moscow's decision can be heard from those interviewed in Afghanistan in this regard. On the other hand, not surprisingly, Afghan women hold little hope of any betterment under the patriarchal, male chauvinist order the Taliban have once again imposed. In short, those hopeful of better days and those gloomy at the prospects for the future amongst the Afghan people in the aftermath of Russian recognition can only be pitied and prayed for. Afghanistan not only shows no signs of ending the dark night it has been enveloped in after the (second) Taliban takeover, Kabul is being rewarded with recognition (actual and potential) by countries whose own interests (as usual, no great surprise there) override any other principle. Copyright Business Recorder, 2025
Telegraph
07-07-2025
- Business
- Telegraph
The Russian potato shortage that shows Putin's economy is on the brink
When the last leader of the Soviet Union visited Chequers for lunch with prime minister Margaret Thatcher in 1984, one topic of discussion was potatoes. Raisa Gorbachev, the wife of Soviet leader Mikhail, claimed Russia had 300 ways of cooking the humble spud, prompting Michael Jopling, Britain's agriculture minister, to express disbelief. She later posted a Russian cookbook to Jopling with the clarification: 'In fact, there are 500, rather than 300, recipes to cook potatoes.' For Vladimir Putin, Russians' appetite for the vegetable has become problematic, however. Shortages have pushed up prices by 167pc over the past year, the biggest rise of any food. 'It turns out that we don't have enough potatoes,' Putin admitted during a televised meeting in May, adding: 'I spoke with [Belarusian leader] Alexander Grigoryevich Lukashenko. He said, 'We've already sold everything to Russia.'' Since the invasion of Ukraine in 2022 made Russia the world's most sanctioned country, eagle-eyed economists have watched closely for signs of economic damage which have proved remarkably elusive. But now surging food prices and labour shortages are keeping inflation high, driving big cracks in the economy. 'We're basically already on the brink of falling into a recession,' economy minister Maxim Reshetnikov told a conference recently. Could Russia's well-oiled war machine be running out of steam? The strain is definitely starting to show, says Alexandra Prokopenko, a fellow at the Carnegie Russia Eurasia Center. 'Slowing economic growth coupled with high inflation leaves Russia close to stagflation,' says Prokopenko, a former adviser at Russia's central bank. It means Putin is vulnerable. Further falls in oil prices or a tightening of sanctions can now inflict far greater harm than they did previously, Prokopenko warns. 'None the less, we are not quite there yet,' she cautions. Another economist at a European bank, who didn't want to be named, said the waters were still muddied when it came to Russia's economy. 'The momentum is much slower than it used to be. If we look at the deficit, it has been widening. That suggests that despite the fiscal support, which is most likely aimed at military-related areas, the Russian economy is clearly not as robust as it used to be,' they said. In other words, Putin's war economy is likely at capacity: 'The potential to draw more people into the army and military production has been used. There is a limit to how many shifts people can work in factories, producing munitions and military uniforms.' As a result, inflation was running high at 9.9pc in May, fuelled by billions of roubles ploughed into the war effort, worker shortages and other price pressures. To quell it, interest rates are at 20pc, even after a one percentage point cut in June. 'The financial resources are not endless. The central bank, which maintains some sort of independence, has to maintain a very restrictive monetary policy. That lowers the availability of finance for the rest of the economy,' the economist adds. Still, experts caution against concluding this means all Russians must be struggling. Unemployment is hovering around record lows, high interest rates are boosting savings and mortgage borrowers are to some extent shielded. Wages have also surged. 'Yes, inflation has been high in the last three years, but nominal incomes have been growing much faster, therefore the average real wage actually increased quite substantially. I travel to Russia quite often, and there doesn't seem to be any discontent which is about to bubble to the surface,' says Tatiana Orlova, from Oxford Economics. She believes the economy minister's warning of recession was an attempt to cajole the central bank into cutting rates further – a more underhanded attempt than Donald Trump's frequent angry social media outbursts against Jerome Powell, the US Federal Reserve chief. She says that people in some sectors – teachers, doctors and others – will probably feel worse off because of high inflation. But the war has also created a big class of winners in poor towns across Russia. 'The families who are affected by the war because someone has joined the contractual army, for example, are using it as a social lift. The government is paying very high bonuses equivalent to between $20,000 [£14,600] and $35,000 just for signing up,' Orlova says. 'Those fighters are also receiving monthly wages, which are quite above average. So the families are suddenly able to afford more things. They can make a down payment for a new flat or buy a new car. It's a weird paradox that the war actually brought prosperity to families at this horrible cost,' she adds. This is echoed by the other economists who study the Russian economy. The country is experiencing the slow-burn effect of sanctions, but with very different impacts across the population. 'It's important to understand that the Russian households are not poor. The situation is far from catastrophic. The mood from now on will likely deteriorate because of the lack of new stimulus. These are the longer-term consequences of everything that the Russian government put upon itself in 2022,' said another economist. 'The politically liberal middle class that was formed in the early 2000s, which was mostly employed in the private sector, left the country in response to Putin's war. Since 2022, the new middle class has emerged among those beneficiaries [from the war], and they have been upscaling their consumption patterns,' they add. And this brings us back to potatoes. Prices of the beloved vegetable have surged because of poor harvests have reduced supply. They have only just started easing slightly. Bellwether of household finances Any sign of heightened popularity is worth watching: 'Potatoes are a Giffen good. That means if household wealth is going down, then some lower quality products such as potatoes see increasing demand,' the economist says. In other words, if people feel poorer they typically buy more potatoes, making it an unusual bellwether of household finances in a country with sparse reliable data. But says Andrey Sizov, a Russian commodity expert, other food types like butter, eggs and meat have also become much costlier after shortages. This may in fact reflect people trading up from potatoes. 'My speculation is that supply went down, and actually demand went down a little bit. Potatoes are not an expensive food. In the previous two years, it was first of all poor Russians who were making more money. So they could consume something else – less potatoes, more meat and butter, for example,' Sizov says. The humble spud's mixed signals underline that even as Russia's economy has lost momentum, some are feeling the gain and others the pain. But with the longer running toll from sanctions mounting and a costly war nearing its fourth anniversary, Putin has few options to trigger another growth spurt. 'The central bank could cut interest rates. But that would risk another surge in inflation. Another option is for the government to increase spending, but this is also more likely to increase prices than stimulate growth,' says Prokopenko, the former central bank adviser. 'Protectionism is yet another option. But this only works at the expense of consumers. In other words, it is ordinary Russians who will feel the consequences – through either increased prices, falling income, or less choice on the shelves,' she adds. Will the economic strain matter to Putin? He has been emboldened by a friendlier regime in the US under Trump administration, which has just paused some arms shipments to Kyiv. 'I do not see that the finances are at breaking point. This could go on for years,' warns Orlova. 'In Russia, people have very low expectations. They expect their life to be hard. They expect to always fight and find new ways of surviving. So it's just life as usual. When the population has very low expectations, it actually helps those who rule the country to do whatever they want,' she adds.
The National
26-06-2025
- Business
- The National
Nato split highlights the confusion lying at its heart
But the US, then on the cusp of its unipolar moment, was in no mood to compromise. If the Soviets wanted cash, president George Bush Senior declared at the time, they would have to embrace economic pain – Thatcherite shock therapy, in fact: deregulation, spending cuts, privatisation and the abolition of consumer price controls. Of course, shock therapy is precisely what Russia got. Throughout the 1990s, Russian living standards slumped as the IMF asset-stripped the country and oligarchs annexed its natural resources. Out of such chaos, Putin and Putinism emerged. READ MORE: Meet the engineer hoping to be the first Palestinian-Scot MSP in Holyrood The West, however, had been warned. According to Zubok, in response to Bush's demands, Eduard Shevardnadze, Gorbachev's then-foreign minister, wrote to the US secretary of state James Baker. In the absence of financial assistance, Shevardnadze said, Russia would fail, and if Russia failed, Western governments would soon find themselves confronted by 'some beastly dictator' whose actions forced them to spend 'more on defence than what Gorbachev is asking from you now'. Baker was unmoved and Gorbachev's dream of a Soviet Marshall Plan never materialised. I found it hard not to think about that anecdote as this week's Nato summit, held at The Hague, unfolded across my TV screen. The central theme of the summit was deterrence – bigger weapons, deeper intel and smarter tech to counter the threat posed by Vladimir Putin. Nato's secretary general, Mark Rutte, worked hard to convey an image of Western consensus. 'Across the alliance, we have opened hundreds of new production lines and expanded existing ones,' he said during his opening remarks on Tuesday afternoon. 'We are now on course to produce more ships, planes and ammunition than we have done in decades.' But the facade began to crack even before the summit got under way. On Monday, Rutte announced that all Nato allies had agreed to raise their defence budgets to a record-breaking 5% of GDP, in line with commands issued by Donald Trump. Hours later, Rutte's announcement was contradicted by Pedro Sanchez, the socialist prime minister of Spain, who said that Madrid would meet its defence obligations by spending just 2.1% of GDP. Sanchez's reasoning was sound. The 5% target was 'incompatible' with Spain's domestic welfare commitments. Plus, for all the talk of European 'strategic autonomy', the target would only broaden Europe's dependence on Washington by incentivising 'off-the-shelf' purchases of US military hardware. Rutte's spat with Sanchez highlights the confusion at the heart of Nato's post-Soviet existence. Is the alliance a mechanism for the projection of US hard power abroad, a containment structure for Russian nationalism or the nucleus of an independent European defence system? Europeans themselves can't decide. In Finland, Poland and the Baltic states, support for Nato is strong because the immediate sense of Russian menace runs deep. But in Hungary and Slovakia – Nato members since 1999 and 2004, respectively – populist governments with pro-Moscow sympathies are more eager to placate Putin than to provoke him. Meanwhile, here in the UK, a Labour prime minister simultaneously slashes social security payments while green-lighting the purchase of new nuclear-capable war planes. Our leaders could have listened to Gorbachev and Shevardnadze. Instead, we are still living in the rubble of 1991.
New Statesman
25-06-2025
- Politics
- New Statesman
How a Moscow archivist exposed the KGB, file by file
Photo by ALEXANDER NEMENOV/AFP via Getty Images In the autumn of 1988 I travelled from Helsinki to the Soviet Socialist Republic of Estonia. The reformist Soviet leader, Mikhail Gorbachev, had allowed a limited free-market enterprise to take hold in Estonia and elsewhere in the communist Baltic. Not since Lenin had introduced his abashedly capitalist New Economic Policy of 1921 had profit-making sought to transform the monolithic face of Soviet communism. Gorbachev did not intend to dismantle the ailing Soviet project, however, and was unaware that the USSR was on the verge of disintegration. It was my first visit to the communist bloc and I was filled with excited suspense. My mother was born in the Baltic in 1929 but, having lived most of her life in London, she was resigned to a permanent British exile. She had not been back to her birthplace since the end of the Second World War. In the capital of Tallinn, an air of Kremlin austerity hung over the shops in which Estonians queued with their string 'perhaps-bags' for the odd windfall purchase. The talk was of Gorbachev's economic reforms, but Tallinners looked harried and cowed, and they were mindful not to dally outside the KGB headquarters on Pagari Street. Officially the top floor of the Intourist hotel where I was staying did not exist; it was occupied by the KGB whose listening devices came to light only after the collapse of the Soviet Union. Room telephones were tapped and electronic limpets fitted to the underside of dinner plates. One evening, two very polite detectives from the Spets Sluzhba (Special Branch) of the KGB came to interview me. 'Your mother is from Tallinn? A Baltic German? When did she leave?' The absurd interrogation had one effect: afterwards all three of us went to the Café Moskva in the Old Town to share a bottle of Caucasian Champagne. I was careful to speak in platitudes only: Soviet intelligence was as insidiously effective under Gorbachev as it always had been. What happened next happened quickly. The Berlin Wall came down in 1989 and with Ukraine's independence proclaimed two years later, the Soviet Union underwent what historians call sudden 'state death'. It rapidly disintegrated into 15 independent countries, the largest being the Russian Federation; the smallest, Estonia. Considering the magnitude of what happened, remarkably few people died in the last days of the Cold War. The deaths, thousands of them, would come later, in the inter-ethnic rivalries over Chechnya and Nagorno-Karabakh, and in Vladimir Putin's murder war in Ukraine. Vasili Mitrokhin, a senior KGB operative, had expected to end his days in his native Russia under communism. The demise of the Soviet regime was as unthinkable to him as the prospect that KGB plotters would one day mount a coup against Gorbachev: the world was divided into the communist East and the capitalist West and that was the immutable order of things. Instead, Red Moscow had gone before Mitrokhin knew it. As the KGB's in-house archivist, he had despaired at the inhuman, penalising labour of the gulag and what the Soviet regime had done to Russia and the Russian people in the seven decades since the 1917 revolution. Telling the 'truth' about the Soviet past would serve to strengthen and purify Mother Russia of its accumulated corruptions, he believed. The belief prompted him to note down particulars of the crimes and atrocities as revealed to him over a number of years in the KGB archives. The work was risky in the extreme but Mitrokhin felt he had no choice. As an instrument of Kremlin surveillance, he had himself witnessed enough 'horrors', as he called them. In Ukraine, where he worked as a Soviet prosecuting lawyer in the late 1940s, he most likely sent hundreds of 'class enemies' to the Siberian ice fields as punishment. He seems to have felt some remorse for that. In 1992, while post-Gorbachev Russia opened up to American capital with an undignified free-for-all scramble for state assets, Mitrokhin and his family were smuggled out to the West by MI6. He arrived with an extraordinary cache of top-secret Soviet foreign intelligence files which ranged in chronology from the aftermath of the 1917 Bolshevik uprising to the eve of the Gorbachev reforms in the late 1980s. The notes Mitrokhin had taken from the thousands of files in his care contained details of KGB operations in most countries and identified some 1,000 agents. Mitrokhin's was, said the CIA, the biggest counter-intelligence 'bonanza of the postwar period'. The story of Mitrokhin's exfiltration to the West via the Baltic and repudiation of Soviet communism is the subject of Gordon Corera's pacy, John le Carré-influenced work of non-fiction, The Spy in the Archives. Corera, a former BBC security correspondent, presents Mitrokhin as a Slavophile patriot figure driven by a quasi-spiritual mission to bear the truth. Mitrokhin's aversion to Kremlin-directed communism deepened after 1956 when the Soviet premier, Nikita Khrushchev, denounced Stalin's 'personality cult' and the murderous purges and Moscow show trials of the 1930s. While Khrushchev did not admit to all the regime's depredations – he was implicated in many of them – the unmasking of Stalin paved the way for Gorbachev's perestroika 30 years later and the Soviet Union's eventual demise. During the uneasy thaw that followed Khrushchev's revelations, Mitrokhin became ever more outspoken in his criticism of the KGB's unreformed bureaucracy. He was viewed as a potential liability. Therefore, in 1956 he was demoted from operational assignments overseas to what looked like a dead-end job in the state intelligence archives, where he worked for the remainder of his career. Mitrokhin was energised in his secret work by the example set by the holy redeemer personality (as he saw it) of Aleksandr Solzhenitsyn. The half-Ukrainian Red Army officer, having been jailed for making jokes about Stalin, had gone to ground in Estonia in 1965-67 in order to write his memoir, The Gulag Archipelago, which compared the Soviet penal system to a cancer metastasising up and down the railways and rivers of the USSR. Solzhenitsyn's was a documentary of unsparing lucidity and stern moral judgement that impelled Mitrokhin to expose more of what he called the 'the trail of filth' left in the archives by KGB operatives. He came to see the entire Soviet system as the negation of everything that Solzhenitsyn stood for. In the Soviet state's vaunted egalitarianism he found no promise of a bright, red future but a spirit of malice and suspicion, in which every Russian lived in fear of his neighbour and schoolchildren were urged to spy on their own parents. The initials 'KGB' came to have flesh-creeping associations for him. In Mitrokhin's view, the nomenklatura system under the Soviets had replaced the career nobility system under the tsars. A fawning class of policemen-bureaucrats had dogmatised Marxian thought to their own self-serving ends. Subscribe to The New Statesman today from only £8.99 per month Subscribe Mitrokhin wanted nothing so much as to 'destroy' the nomenklatura, says Corera. He saw his chance in 1972 when he personally oversaw the transfer of the KGB archives from Moscow's infamous Lubyanka to an HQ outside Moscow. He began to smuggle out, concealed in his shoes or socks, scraps of the notes he had been taking in shorthand; he then secreted them in milk churns under the floorboards of his dacha. After his retirement in 1984, he plotted ways to move the archive out of the shadows into the West. Only after the USSR's dissolution was he able to take samples to the British embassy in Riga, Latvia's capital, where MI6 Baltic took him at his word. On the 75th anniversary of the Bolshevik revolution – November 1992 – he was allowed to settle in the UK. Mitrokhin, the man who waged war on Red Russia from from the archives, died from pneumonia in London in 2004 at the age of 81. The Spy in the Archive: How One Man Tried to Kill the KGB Gordon Corera William Collins, 336pp, £25 Purchasing a book may earn the NS a commission from who support independent bookshops [See also: Giorgia Meloni's selective memory] Related
Epoch Times
21-06-2025
- Entertainment
- Epoch Times
‘Red Lily': A Cold War Adventure in Paris
It's 1989. The Soviet Union and Warsaw Pact still exist. Gorbachev has instituted Glasnost, but the communists are still in charge, attempting to control everything within Russia. 'Red Lily: A Delightful Cold War Spy Mystery with a Parisian Flair' by Janice Graham is a charming satire of spy novels, set in the dying days of the Soviet Union. Carl Box is a paint and varnish consultant for Disney's Epcot Center. His hobby is memorizing color hex codes, the six digit hexadecimal number defining a color.
